Vladimir Plahotniuc Appears as Direct Beneficiary in Companies Benefitting from Business with the State

Vladimir Plahotniuc Appears as Direct Beneficiary in Companies Benefitting from Business with the State
01 August 2020 | 13:43

Three companies that in recent years have received tens of millions of dollars from Metalferos, a joint-stock company in which the state is the major shareholder, listed Vladimir Plahotniuc, former leader of the Democratic Party, as their direct beneficiary. 

The companies received money on their accounts, including during the period when Plahotniuc held public office. However, the former politician declared neither the money nor the companies in his declarations of assets and personal interests.

The prosecutors are examining the evidence in the criminal case for more than eight months, and some of this evidence involves a deputy of the present ruling coalition in Parliament, formed by the Democratic and Socialist Parties.

Metalferos is a joint-stock company, which deals with the purchase, processing, and marketing of ferrous and non-ferrous metals after-processing. The state owns 78.28 percent of the company’s common stock, through the Public Property Agency. Recently, the Government announced that it will put up for sale all its shares in mid-August.  

However, while the privatization of Metalferos is expected to take place soon, the prosecutors have not identified the beneficiaries of several schemes that embezzled the company of tens of millions of dollars during several decades.

During the past 20 years, Metalferos has repeatedly been accused of corruption. In recent years, the company was affiliated with the former leader of the Democratic Party and Moldova’s tycoon, Vladimir Plahotniuc, and his entourage. 

ZdG scrutinized dozens of documents, confirming multiple allegations related to the activity of Metalferos in the last decade. In December 2019, a criminal case was opened to investigate the illegalities at Metalferos, but the case remains unsolved.

Sixty Million Dollars Went Through the Accounts of Two Companies with Similar Names

According to the documents analyzed by ZdG, Metalferos received money from several domestic and foreign companies in 2015-2019. Thus, between January 2015 and September 2019, the Moldovan Metallurgical Plant (Moldavskii Metallurgicheschii Zavod) transferred about $127 million (2.169 billion lei) to Metalferos accounts, opened at Victoriabank. 

Metalferos also received approximately $73.95 million from five foreign companies between January 2015 and September 2019, after providing them with ferrous scrap or lead-acid battery residues. Two companies with similar names, Metoil Trading LLP (limited liability company) and Metoil Trading FZE (free zone establishment company), got $60 million on their accounts.

Metoil Trading LLP is registered in the United Kingdom (U.K.), and has a bank account opened at ABVL Bank in Latvia. Between January 2015 and February 2017, Metoil Trading LLP transferred to Metalferos $27.35 million. 

Metoil Trading FZE, a company with a similar name, is registered in the United Arab Emirates and has bank accounts opened at the National Bank of Ras AL-Khaimah and Emirates NBD Bank PJSC. From March 2017 until June 14, 2019, Metoil Trading FZE transferred to Metalferos $33.076 million.

Companies from Romania and Ukraine Buying the Metal Scraps Exported by Metalferos

Metalferos exported metals to companies, specializing in the ferrous and non-ferrous scrap business operating in Ukraine and Romania. In return, these companies transferred money to Metalferos accounts. 

According to the detailed customs declarations, the Megatex and Vellonton are two companies that received lead-containing waste and scrap exported by Metalferos in Ukraine. Vellonton company, registered in U.K., transferred about $2.96 million to Metalferos. Vellonton company had bank accounts opened at ABLV Bank until October 20, 2017, and later at PPF Banka AS.

Megatex company is also registered in the U.K. The company is doing business in Ukraine. The company has bank accounts opened at the State Export-Import Bank of Ukraine. Between January 2015 and September 2019, the company transferred to Metalferos $1,92 million. 

The Rombat company, registered in Romania, has bank accounts opened at ING Bank NV Bucharest Branch and Banca Comercială Română. Between January 2015 and September 2019, the company transferred $4.48 million to the Metalferos accounts.

The Companies Buying Metal from Metalferos Are Intermediaries

The companies that purchased ferrous metals and then transferred money to Metalferos accounts, were intermediaries. While scrutinizing the customs declarations, ZdG discovered that Metoil Trading LLP, until February 14, 2017, and, subsequently, Metoil Trading FZE, until June 14, 2019, only brokered the exports made by Metalferos to other companies from Germany, Turkey, Austria or the Netherlands. So did companies operating in Ukraine.

ZdG found that in 2019, after the Democratic Party ceded power in government and Vladimir Plahotniuc fled the country, the Latvian Money Laundering Prevention Service informed the Chișinău authorities that between October 30, 2012, and June 1, 2015, the citizen Vladimir Plahotniuc had the signatory right at Metoil Trading LLP. At that time, Plahotniuc was a deputy and even the first vice-president of the Parliament of Moldova, a position he held between December 2010 and February 2013. Plahotniuc did not declare then this company in his declarations of assets and personal interests.

Vladimir Plahotniuc

Subsequently, from June 1, 2015, until the closing of the accounts on February 13, 2017, Vladimir Marian, born on January 16, 1954, and officially residing in Oxentea, Dubăsari, was another beneficiary of this company. ZdG tried to find Vladimir Marian in Oxentea. However, Valeriu Rusu, the mayor of the locality, as well as the villagers said there are no people in the village with the surname Marian.

Sources within the law enforcement bodies claim that Vladimir Marian would have died. Previously, however, he was a simple intermediary within this company. According to the information provided by the Latvian authorities, in recent years, until dissolution, Ion Axentii was allegedly the effective beneficiary of Metoil Trading LLP company.

Searching for the Effective Beneficiary of the Metoil Trading LLP

In Chișinău, we found Ion Axentii, a man with a similar name, age, and birth date to that of the person listed as the beneficiary of Metoil Trading LLP. We found out that his residence visa is in a 48-square-meter apartment in Chișinău.

The young man’s mother informed us that her son is abroad for almost 10 years and that he has nothing to do with metal companies. Later, we talked to Ion Axentii, who confirmed the information that his mother told us. He stated that he did not know Plahotniuc nor Andronachi and that he heard of the companies in which his name appears as a beneficiary for the first time. However, the young man claims that he was involved in a strange case in 2017. 

“I came back to Moldova to renew my passport because it expired. There, however, I was told that there was already a passport issued in my name,” says Ion Axentii. He states that he did not understand exactly what happened, but that the people there told him that his passport had been issued with the consent of someone important. 

Ion claims that he requested the cancellation of the passport that was allegedly issued without his will and requested another one. However, he did not want to file complaints or verify who would have issued a passport in his name.

On paper, he appeared as a beneficiary of a company with tens of millions of dollars in accounts, but Ion Axentii does not own property on the territory of Moldova. However, he is listed as the founder and administrator of Prodmezel-Exim. 

The company was founded in 2002, when Vladimir Andronachi, a deputy from the Democratic Party, whose name has been affiliated with the Metalferos business for the last decade, managed it. 

Andronachi ran the company that was doing business in the field of meat trade and import during 2002-2005. Ion Axentii claims that he has nothing to do with this company, of which he hears for the first time.

A Profit of $8 Million in Just Two Years and One Month

Metoil Trading LLP was founded in 2006. Until 2017, the company was managed by a Panamanian citizen, who is listed as a director of dozens of other companies in several jurisdictions around the world. Subsequently, Vadim Tomașevschi, a Moldovan citizen, and the Romanian citizen Sebastian-Andre Dumitrescu, who is listed as a resident of the U.A.E., managed the company until its official dissolution, in February 2018. The name of Sebastian-Andre Dumitrescu can also be found in U.A.E. companies, about which the anticoruptie.md portal wrote that they made transactions with other companies affiliated with Plahotniuc.

Between January 2015 and February 13, 2017, Metoil Trading LLP transferred to Metalferos $27.35 million, and it received on its accounts approximately $35.21 million from companies registered in Turkey, Germany, Austria and the Netherlands, the countries to which Metalferos exports were made. In other words, the company, registered in U.K., obtained during these two years and one month, a profit of $7.86 million only from the intermediation of Metalferos metals exports.

Specifically, Metoil Trading LLP received $5.54 million from Sahinler Met.San.Ve Tic.AS, registered in Turkey, $19.8 million from Scholz Recycling GMBH Co., registered in Germany, $7.99 million from Mast Metall – Handels GMBH, registered in Austria and $1.73 million from Jewometaal Stainless Processing BV, registered in the Netherlands.

The Millions from Abvl Bank Accounts in Latvia Transferred to Other Bank Accounts

Out of the $8 million left on the ABLV BANK account, Metoil Trading LLP transferred about 114,000 dollars for transport services to the account of Nomadic Shiping INC at the Regional bank Investiciju Banka from Riga, Latvia. The company transferred almost $8 million, as well as other money that it had on its account, to other offshore companies. 

According to the documents consulted by ZdG, Metoil Trading LLP transferred $1.41 million to the ABLV Bank account of the Brasco Overseas Corp offshore company based on several invoices.

According to official information, 45-year-old Moldovan citizen Ghenadie Cuciuc was the effective beneficiary of the Brasco Overseas Corp company. However, he did not respond to ZdG’s messages to discuss the subject.

Brasco Overseas Corp was registered in 2005, in Panama and had a share capital of 10,000 dollars. The company was officially administered by intermediaries, who carried out a similar activity for hundreds of other companies in parallel.

Two Offshore Companies Received Money from Metalferos Contracts

Between October 30, 2012 and June 1, 2015, Plahotniuc was the only beneficiary at Steel Marketing Company from the Belize Islands, which received 609,500 dollars from Metoil Trading LLP. Vladimir Marian was its beneficiary between June 2015 and February 10, 2017. According to public information, the company is inactive today.

Innotube company, which received $4.47 million from Metoil Trading LLP, was founded in the U.K. in August 2014 and was dissolved in September 2017. Data from the U.K. companies’ portal show that Alexandr Zalevschii, a 58-year-old Moldovan, was the company’s beneficiary in June 2016. There is not much information about him. ZdG tried to talk with him, but to no avail.

A person, with a similar name, is the founder of Plan Metalic company, which is present on the metals market. The company was registered on April 25, 2012, and its legal address is in Bălți, in an old house on Suceava Street. 

Stimetalux company was registered at the same address and on the same day. The administrator of this company is Carolina Andriuță. Previously, ZdG wrote that Andriuță is the Moldovan representative of the offshore Webwest Alliance from Belize. Webwest Alliance company is involved in the privatization of the Râșcanu-Derojinschi mansion from 62 București Street, midtown Chișinău, on whose territory a hotel is now being built. The offshore was also the owner of the Hidroenergie-Cons company, in which Fiodor Vasilcov, the father-in-law of Vladimir Andronachi, deputy of the Democratic Party, is the sole partner and administrator since February 2018. According to the 2019 financial report of Metalferos, Fiodor Vasilcov is chief engineer at Metalferos.

Although Plahotniuc’s former friends left the Democratic Party and formed Pro Moldova, a new political party, Andronachi remained a member of the Democratic Party. Recently, Pavel Filip, the president of the Democratic Party, declared publicly that Andronachi could eventually join the Socialist Party.

Plahotniuc Is the Beneficiary of Another Company that Received $4.63 Million

At the same time, Metoil Trading LLP transferred around $9.72 million to the ABVL Bank accounts of three other offshore companies. Thus, $4.63 million was transferred to the offshore company Rowallan Overseas, registered in Panama. Innotube company, registered in the U.K., received $4.47 million designated for “buying agent agreement 01/12-B,” and the  Steel Merketing offshore company, registered in Belize, received 609,500 dollars for “credit agreement no. 01/07 of 07.07.2015.”

According to the information officially presented by the Money Laundering Prevention Service of Latvia, Plahotniuc was the effective beneficiary of Rowallan Overseas company between October 30, 2012 and June 1, 2015. At that time, Plahotniuc was a deputy and first vice-president of the Moldovan Parliament. As in the case of Metoil Trading LLP, the former deputy and former president of the Democratic Party did not include this company in the declarations of assets and personal interests submitted at that period. 

Between June 1-22, 2015, the beneficiary of this offshore was 70 year-old Serghei Noscov, a Moldovan citizen. Previously, the reporters from Rise Moldova wrote that he was a key figure in managing the business controlled by Plahotniuc. 

In 2006-2009, Noscov was the major shareholder of NIT, the Advac Associates offshore company. Earlier, he was the manager and sole partner of Nobil Club, the company that manages the Nobil Hotel in the center of Chișinău as well as Argus-S security agency, also controlled by Plahotniuc.

From July 9, 2015, until September 25, 2015, the effective beneficiary of the company was Vladimir Marian, the man who earlier had the signatory right at the company Metoil Trading LLP and who had in the meantime died, according to ZdG sources.

A Company Involved in the Bank Fraud Did Business with Metalferos

Rowallan Overseas appears in the annexes of the Kroll II report, as well as in a report of the General Prosecutor’s Office on the investigation of the bank fraud. 

In December 2019, the report, based on the criminal case opened against Plahotniuc on money laundering, was presented to the deputies. The report revealed that Plahotniuc was the final beneficiary of several offshore companies, including Rowallan Overseas company. 

The companies received $18.2 million and €3.5 million, which “came from illicit sources, being obtained from non-performing bank loans granted by Banca de Economii, Unibank, and Banca Socială,” stated the report.

At the same time, the annexes to the Kroll report state that Rowallan Overseas received around $646 million during June 2006 and September 2015.

The Kroll company established that half a million dollars, received by Rowallan Overseas, later reached the accounts of Finpar Invest company, founded by Plahotniuc’s family. In June-July 2013, the offshore received $12.5 million that came partially or fully from the three banks involved in the bank fraud. The money were transferred through several offshore companies, and later reached the companies in the Prime Management group, the only company that Plahotniuc officially included in his declarations of assets at that time.

The Most Important Intermediary from Metalferos Worked in the United Arab Emirates

Between March 2017 and June 2019, Metoil Trading FZE, from the U.A.E., was the metal sales intermediary for Metalferos. 

Metoil Trading FZE took the place of Metoil Trading LLP, a company with a very similar name. The change of the Metalferos intermediary coincided with the relocation of several businesses affiliated with Plahotniuc to the U.A.E. This time, Plahotniuc included the businesses in his declaration of assets and personal interests for 2018.

The U.A.E. displays selectively data about companies registered on their territory. Therefore, we could not find out who are the representatives of this company. It is certain, however, that Metoil Trading FZE, with accounts at the National Bank of Ras AL-Khaimah and Emirates NBD Bank PJSC, transferred $33.076 million to Metalferos for the acquisition of metals. The transfers continued until June 14, 2019, the time when the Democratic Party ceded the government and Plahotniuc (the party’s leader) fled the country.

ZdG submitted some questions to Plahotniuc through Lucian Rogac, one of his lawyers, asking him about Metalferos. The defender mentioned that he will redirect our request to the Plahotniuc. At the same time, the lawyer informed us that he does not have official information about Plahotniuc’s status in the Metalferos case. Andronachi did not answer ZdG’s calls.

The Anticorruption Prosecutor’s Office Announced about a Criminal Case in December 2019

On December 4, 2019, the Anticorruption Prosecutor’s Office announced that it carried out 48 searches at Metalferos and other companies. According to the Anticorruption Prosecutor’s Office, seven people were detained for 72 hours, and a criminal case was opened to investigate the illegal actions of decision-makers at Metalferos and the other companies that were searched. 

An arrest warrant was also issued on the name of Alexei Timbrovschi, who ran Metalferos in recent years. Before the searches, Timbrovschi left the country and was not found. 

Following the searches, the prosecutors announced that they discovered illegalities committed within Metalferos, in addition to the metal export schemes.

Thus, between January 2015 and September 2019, Metalferos received from another company over €109.707 million (2.16 billion lei) for ferrous and non-ferrous metals through the bank accounts held in a Moldovan bank. Subsequently, from that amount, intermediary companies received payments for the metal sold to Metalferos at an exaggeratedly increased prices. These intermediary companies were cumulatively affiliated with two businessmen, Nicolae Pelin and Iurie Cecan.

“The price difference was appropriated and distributed among the members of the criminal group, and the metal collectors received what remained, according to the market price. The amount of the pecuniary damage reaches over €10.91 million (215 million lei),” the prosecutors announced in December 2019. 

Meanwhile, Eugen Rurac, the prosecutor who investigated the criminal case at the initial stage, resigned. In December 2019, he addressed a letter to the Prosecutor General, claiming that several decision-makers within Metalferos, including Catană, President Igor Dodon’s godfather, exert pressure on him. Meanwhile, the detainees in the Metalferos case were released from custody.

Following the Schemes, Tens of Millions of Dollars Were Embezzled from Metalferos, but the Company Refused to Appear in the Case as an Injured Party and Demand Pecuniary Damages

Eight months after the General Prosecutor’s Office issued the press release about the Metalferos case, the institution did not inform the public about the progress of the investigation.

ZdG also established that although tens of millions of dollars were embezzled from Metalferos, the company refused to appear as an injured party in this criminal case and to demand pecuniary damages from the guilty persons.

“The criminal investigation into this case is ongoing. The investigation has established the persons involved in collecting and exporting ferrous and non-ferrous metals. A decision will be taken on the procedural status and how to conduct further investigations after receiving the results of rogatory commissions,” stated the Prosecutor’s Office in a reply to ZdG.

However, the institution avoided mentioning whether Plahotniuc and Vladimir Andronachi, currently a deputy of the Democratic Party parliamentary faction, have any status in this criminal case. 

“Based on the interest of the criminal investigation, the Prosecutor’s Office cannot detail certain information, including with reference to the personal data of the alleged offenders, as it could jeopardize the investigation,” they said.

From January 2020, Some Direct Contracts with Scrap Metal Companies Were Signed

In December 2019, Igor Cujbă, a former police officer, became the General Director of Metalferos. Cujbă worked in Romania together with Pavel Voicu, the current Minister of Internal Affairs and former adviser to President Igor Dodon. At the same time, Sergiu Catană, Dodon’s godfather, is the financial manager of Metalferos.

In January 2020, shortly after the appointment of the new director, Metalferos announced that it had signed two direct metal sale contracts with international companies in the field of scrap metal trading. This happened for the first time in the history of Metalferos. 

Igor Cujbă (right), presented as the new General Manager of Metalferos, after winning a competition announced by the authorities

On January 18, 2020, representatives of Metalferos company and representatives of the Sahinler Metal Sanayi ve tic., a Turkish company, signed the first contract. On January 22, 2020, Metalferos and Mast Metall Handels GmbH, a company from Austria also signed a contract. 

According to Metalferos’ financial report for 2019, the company also signed a contract with Scholz Recycling GmbH, a German company, and a contract with Moldovan Metallurgical Plant (Moldavskii Metallurgicheschii Zavod), located in Râbnița, the North-East of Moldova, under the control of the breakaway Transnistria region.

At the same time, Metalferos announced that they extended the contracts for 2020, with Rombat company (Romania), Megatex company (Ukraine) and Vellonton company (Malta). 

The Metalferos Minority Shareholders Sent an Anonymous Letter

In early July 2020, a group of minority shareholders of Metalferos submitted an anonymous letter to Prosecutor General, Alexandr Stoianoglo, claiming that there are attempts to privatize the joint-stock company at the lowest possible price. They alleged that the current management of the company would cover the schemes set up by previous management. 

“The financial reports for the first half of 2020 reveal that Metalferos is already becoming unprofitable, compared with the years 2018-2019. The reason is obvious. Not one, but two clans are already being financed from the stolen money,” specified the letter addressed to the press, as well as to the Prosecutor General.

The financial report issued by Metalferos for the first six months of 2020 has not yet been made public. However, the financial data for 2019 show that the company reported a net profit of over €1.1 million (21.7 million lei), while the net profit for the first six months of 2019 was higher, around €1.35 million (26.6 million lei).

In February 2020, the Government announced the privatization of Metalferos. On July 20, 2020, the Public Property Agency announced that the auction will take place on August 17-21, 2020. According to the Public Property Agency, the auction will take place through the Stock Exchange, and the initial price is almost €46 million (907.8 million lei).

The General Director of Metalferos, Igor Cujbă, Answers to the Questions Addressed by ZdG

  • Asked about the criminal case and the fact that Metalferos does not have the status of an injured party, Cujbă stated: 

“It is not within my competence to comment on the criminal case. I can neither say what were the reasons to open it. As far as I know, currently, Metalferos has no status in the criminal case. It is the responsibility of law enforcement. Since I was appointed as general manager, we have not received any requests. I only know that all the documents, which have been collected, are in the hands of the competent bodies.”

  • Asked about the elimination of the intermediaries, and the extension of the contracts for 2020 with the Ukrainian companies, Cujbă said:

“I do not know who we eliminated and who we did not eliminate. Now, we have business relations with some Western European partners, who have been on the metal market for years. They are recognized and have rich experience. I do not know what information you have, but we have direct relations with recognized partners now. The banks carry out checks, and the legal institutions verify our relationships with all our partners. I think you realize we are being monitored 24/24.”

  • Asked about the anonymous letter from Metalferos minority shareholders and the financial indices for 2020, Cujbă mentioned:

“I cannot comment anonymous letters. The indices are the same as in other economic domains. Everybody felt the impact of the pandemic. The indices cannot be at the level of the previous years.

ZdG reporter: So, it was not done intentionally, in view of privatization of Metalferos …

Igor Cujbă: Definitely not…. Metalferos, as well as other companies, have been affected.”

  • Asked about the privatization of the joint-stock company, Cujbă answered: 

“Both I, as head of the enterprise, and the management team, want the team to continue its work. We want the 230 employees, who are from adjacent villages, to continue to work at the enterprise, to receive wages, and support their families. We are the decision-making body, and our task is to ensure the further activity of the company, to make a profit and pay the state taxes and the dividends we get.”

AUTHOR MAIL

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