Yara external investigation confirms previous corruption findings

After Board and Management of Yara International ASA (OSE: YAR) notified the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) early last year of possible irregularities, law firm Wiersholm was appointed to conduct a broad external investigation. Yara says that as has come to its attention already before, areas of concern related to processes in Libya, India and Switzerland were discovered in the said 31 million NOK investigation.

In Libya payment offers to a consultant during the establishment of Libyan Norwegian Fertilizer Company with the National Oil Corporation and the Libyan Investment Authority are documented and eye witnesses claim to have seen a payment taking place although there is no written record of such. One million USD ”unacceptable” payment was given by Yara to a consultant in India related to negotiations with Krishak Bharati Cooperative Limited for a possible joint venture that never materialized.

In Switzerland a number of worrying payments from fertilizer trading company Balderton Fertilisers SA totalling some 15 million USD to people associated/employed by Yara or Balderton as well as payments of several million with ”no commercial basis” have been uncovered. These happened after Yara acquired 50% of shares in Balderton in 2006 and until Yara acquired 100% ownership in 2010.

Økokrim’s investigation is still ongoing and it has had access to a larger amount of evidence than the law firm. Wiesholm’s investigation was done in full openness toward Økokrim. In May it was reported that two members from Yara’s management, Head of Upstream Tor Holba and Chief Financial Officer and Head of Strategy Hallgeir Storvik, will be facing Økokrim charges. They stepped down from these positions until the situation related to the charges is resolved. Yara says that before the investigation is finished, it cannot conclude on questions related to responsibility of individuals or individual companies.

Yara says it has notified former owner of Balderton on possible legal action. Such action may be taken against some individuals as well. Yara has worked hard to establish strict ethical guidelines all through the organization in the industry that is very complex and in business with complex ownership deals. The company has provided a lot of detail on the findings on its own website.