Global Investigations Review - The law and practice of international investigations

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Thursday, 21 March 2019

Israel considers scrapping deal with star witness in ThyssenKrupp submarine case

Israel’s state attorney reportedly said it might rescind its plea agreement with Michael Ganor after the ex-ThyssenKrupp representative recently contradicted the “detailed” testimony he previously gave in an investigation into a 2015 deal to purchase three submarines from the German conglomerate. 

The state prosecutor, which launched an investigation into the US$1.5 billion order of ThyssenKrupp submarines in March 2017, said it was considering scuppering the deal on 21 March. 

Israeli police reportedly arrested Ganor on 19 March after he said he planned to change his testimony. 

Ganor reportedly agreed to be a cooperating witness in the case in 2017 in return for a fine and a 12-month sentence for tax offences. 

Bribes paid by Odebrecht to Ecuador's ex-vice president returned

The government of Ecuador has reportedly received the US$13.5 million that Brazilian construction company Odebrecht paid to its former vice president Jorge Glas.

In January, the Ecuadorian government said that it had recovered the money that Odebrecht paid to Glas through a Hong-Kong-based company owned by the former vice president’s uncle. 

The money ended up in an account linked to Ecuadorian telecoms company Telconet, which then agreed to return it. Telconet is not accused of wrongdoing. 

An Ecuadorian court sentenced Glas to six years jail in 2017 for receiving US$13.5 million in bribes from Odebrecht.

The company admitted to paying US$33.5 in bribes to Ecuadorian officials in a 2016 trilateral settlement with Swiss, Brazilian and US authorities.

French prosecutors open second investigation into Russian oligarch

A French judge has placed Russian official Suleiman Kerimov, whose family reportedly controls Russia’s largest gold company, under formal investigation for complicity in aggravated tax fraud, according to reports

A prosecutor from the French city of Nice reportedly announced the news on 20 March. The charge is a lesser offence compared to the money laundering and tax evasion charges that Kerimov was acquitted of by a French appeals court in June 2018.

Kerimov’s lawyers reportedly labelled the charges harassment.

South Africa president announces new anti-corruption directorate

South Africa President Cyril Ramaphosa has announced the establishment of a high-level directorate aimed at investigating common law and statutory corruption offences, according to reports.

The directorate, announced on 20 March, will be set up under section 7 of the National Prosecuting Authority Act 1998 and will sit under the Office of the National Director of Public Prosecutions.

The directorate will reportedly focus on investigating allegations of corruption uncovered by a judicial commission, which was set up in 2018 to look into allegations of wrongdoing tied to the Guptas, a wealthy family with ties to the country’s ex-president Jacob Zuma. 

Ex-Steinhoff CFO cooperating with agencies in accounting irregularities probes

The former chief financial officer of Steinhoff has said he is cooperating with “all government agencies” in investigations into a US$7 billion accounting fraud at the South African furniture company, according to reports

Ex-CFO Ben la Grange is one of eight individuals named in an independent report by auditor PwC, which was published by Steinhoff on 15 March. Steinhoff had commissioned PwC to conduct the internal investigation and evaluate concerns raised by Steinhoff’s external auditor, Deloitte, after Steinhoff announced in December 2017 that its chief executive had resigned amid accounting irregularities.

The Johannesburg Stock Exchange, South African police, the Financial Sector Conduct Authority and the country’s capital markets regulator are investigating allegations of accounting fraud at Steinhoff. 

VW monitor criticises company whistleblowing procedures

Volkswagen’s compliance monitor, Larry Thompson at Finch McCranie in Atlanta, has said that the car manufacturer needs to improve its compliance whistleblowing system, according to German newspaper Handelsblatt.  

Thompson, who has been monitoring Volkswagen since 2017 as part of a three-year monitorship imposed on the company after it agreed to pay US$4.3 billion to settle US Department of Justice emissions rigging allegations, made the comments in his second monitor report.  

Brazil's former president arrested as part of Operation Car Wash

Brazil’s former president, Michel Temer, was arrested in São Paulo on 21 March as part of Operation Car Wash, according to reports

Temer was president from 2016 to 1 January. Brazilian prosecutors charged him with bribery twice in 2017 but he avoided trial both times when Brazil’s lower house, the chamber of deputies, vetoed sending the matters to trial.

After Temer left office, prosecutors no longer required the chamber of deputies’ approval to begin a trial against him. Temer has previously denied wrongdoing.

According to reports, police also have arrest warrants for former mining and energy minister, Moreira Franco, and six others. Franco has not responded to the allegations. 

The arrest warrants were issued by Judge Marcelo Bretas at the 7th Federal Criminal Court of Rio de Janeiro.

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