Rompetrol Assets Seized in Corruption Probe

Romanian prosecutors have seized the assets of Rompetrol’s Petromidia refining and petrochemicals complex as part of an investigation into the company’s privatization, which took place in 2000. The assets have been taken, along with shares and bank accounts owned by various individuals, to cover for potential damages suffered by the state which could total as much as €670 million, according to the Directorate for Combating Organized Crime and Terrorism (DIICOT).

Rompetrol Rafinare is owned by KMG International (KMGI), a subsidiary of Kazakhstan’s state-owned oil and gas group KazMunayGaz (KMG). KMGI is in the process of selling a 51% stake in the refinery to China’s CEFC China Energy for $680 million. The deal is expected to close by October this year.

DIICOT is investigating the activities of a group of 14 people suspected of tax evasion, money laundering, and market manipulation. The group is suspected of being involved in the privatization of the Petromidia refinery as well as the conversion of its historic debt.

“Neither KMG nor KMGI have been officially informed of any investigations such as those mentioned in the DIICOT press release. These are new developments which may have a significant negative impact on KMG’s strategic objectives and development plans in Romania,” KMGI said in an official statement.

 

 

 

 

It added that it was open to cooperation with the Romanian government and authorities in this better but would use all legal mechanisms, both Romanian and international, to protect its investment in the refinery.

 

 

 

The trading of Rompetrol Rafinare shares on the Bucharest stock exchange has been suspended.

 

 

 

The refinery and petrochemical production plants are located at Navodari in the southeast of Romania. The complex is the country’s sole producer of polymers, notably LDPE and HDPE.