By Kjetil Malkenes Hovland
OSLO--Norway's part state-owned chemical company Yara
International ASA will pay the country's biggest-ever corporate
fine after it admitted to paying bribes in Libya, India and Russia
several years ago.
The size of the fine--295 million Norwegian kroner, equivalent
to about $48 million--was determined by Norwegian police, who had
charged Yara with three counts of corruption, saying the case was
unusually serious because it included bribery of foreign government
officials.
Police said that Yara had offered $12 million in bribes between
2004 and 2009, but the actual payouts amounted to about half of
that. Yara said it admitted guilt and accepted the fine, but didn't
confirm or comment on the figures stated by the police, following
investigations in 12 different countries.
"It's totally unacceptable that bribes have been paid at all,"
chief executive Jørgen Ole Haslestad told The Wall Street Journal
Wednesday.
He said that he didn't feel he was to blame. "I don't feel in
any way that it would be correct for me to step down on behalf of
Yara as a consequence of this matter," said Mr. Haslestad, who has
been chief executive since 2008.
"I've been the one to introduce new systems, communicate this,
clean up and take the consequences," he said.
The company said it initiated an investigation in 2011 into
potentially corrupt practices dating back several years.
The Norwegian government is Yara's largest shareholder with a
36.21% stake, and government officials on Wednesday asked the
company's chairman for an explanation.
Yara's board has admitted guilt and accepted the fine. Chairman
Bernt Reitan said in an interview Wednesday the matter was "very
serious" but that he was convinced there would be no more
bribes.
Police said Yara executives had agreed in 2007 to pay $5 million
or more to a relative of a minister in the government of former
leader Moammar Gadhafi, related to negotiations over a joint
venture between Yara and Libya's National Oil Corp. This gave Yara
an illegal undue advantage, police said.
"We believe we can prove that individual executives approved
those deals, " said public prosecutor Marianne Djupesland, who is
employed by Norway's National Authority for Investigation and
Prosecution of Economic and Environmental Crime, or Økokrim.
Three former Yara executives were previously questioned and
subsequently released after Yara reported its corruption suspicions
in 2011. The police said they would decide soon whether to
prosecute. All three have denied any wrongdoing.
Police also said Yara managers in 2007 offered a deal to pay $3
million to a relative of an Indian government official were Yara to
succeed in forming a joint venture with a partly state-owned
company. Yara made an illegal transaction of $1 million to a Hong
Kong bank account, police said.
In addition, Yara representatives agreed in 2004 to pay at least
$2.8 million to a representative of a Russian company, related to
phosphate deliveries. In 2008 and 2009, Yara paid $1.14 million to
another representative of the Russian company in relation to a
separate phosphates deal, police said.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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