Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Laundering Probe Focuses On Payments to Kazakhs




BRUSSELS, Belgium -- Multimillion dollar investments made by Belgian energy holding company Tractebel in oil and gas rich Kazakhstan are at the center of an international money laundering probe.


Belgian prosecutors and the company, a subsidiary of France's Suez Lyonnaise des Eaux, confirmed that there is an inquiry after Belgium's Le Soir newspaper said authorities were looking into a payment of $50 million allegedly made by Tractebel to three Kazakh businessmen as a fee to secure a gas pipeline concession.


"There is an inquiry by the investigating magistrate [Francoise] Roggen. Up until now there have been no arrests," said Brussels prosecutor's office spokesman Jos Colpin.


"A few months ago, the Belgian and Swiss judicial authorities started investigations into possible money laundering activities carried out by companies based outside the European Union," Tractebel said in a statement.


"Among those under investigation are some companies and persons with whom Tractebel had business relations in Kazakhstan," the company added.


Tractebel said it was cooperating fully with the investigations and had itself lodged a complaint with a Brussels investigating magistrate on Nov. 10.


Le Soir said the complaint was against a former Tractebel employee and another person alleged to have received kickbacks from the payments.


Tractebel spokesman Jacques Van Hee confirmed the complaint was against a former employee and a second person but declined to discuss the nature of the case brought by the company.


Colpin declined to comment on any details of the case or the allegations made in Le Soir.


Tractebel has two operations in Kazakhstan: Intergas Central Asia JSC, which is involved in running gas pipelines, and Almaty Power Consolidated JSC, which provides power and heat in the Almaty area.


The acquisitions were made by Tractebel's former international energy subsidiary Powerfin, which is now wholly owned by the group.


The gas pipeline concession, obtained in June 1997 more than a year after the Almaty power deal, was championed at the time as a small victory for the Belgian company against much larger oil majors.


Le Soir reported, however, that the investment has since turned sour and could cost the company 1 billion Belgian francs ($25 million) in 1999 after losses of 208 million Belgian francs in 1998, prompting the company to book a provision of 8 billion Belgian francs in its accounts.


Van Hee confirmed that Tractebel had a general country risk provision of 8 billion Belgian francs, "a large, substantial part" of which was to cover its investments in Kazakhstan.