Displaying items by tag: Corruption

Mexico: Police have received arrest warrants for three leaders of an alleged criminal network which stole 10,000t of cement from Cooperativa La Cruz Azul. The El Universal newspaper has reported that the accused stole the cement by running a parallel accounting system from within the company. They sold the stolen cement via the company Azul Concretos y Premezclados.

Mexico: The board of directors of Cemento Cruz Azul has asserted legal control of its Cementos y Concretos Nacionales (CYCNA) subsidiary cement plants in Puebla and Aguascalientes following accusations of ‘looting’ by partners in the company. In a video statement José Antonio Marín, president of the board of directors, said that the move would give the producer greater control over its operations since all cement would be registered in an internal audit programme, according to the Milenio newspaper. He alleged that some partners of the company had sold cement manufactured at the units independently.

José Antonio Cárdenas has been appointed manager of the CYCNA plants to replace Benito Rodríguez Fayad. Fayad allegedly had links to Cruz Azul’s former director Guillermo ‘Billy’ Álvarez, a former director of the company who is currently being investigated by law enforcement for links to organised crime and money laundering.

US: Cemex says that a class action lawsuit filed with the Southern District Court of New York in 2018 has been dismissed. The legal action was made by a group of investors who allege that they were misled in relation to an alleged corruption case in Colombia. The building materials company said that the decision of the court was final and that the plaintiffs would not be entitled to a new trial,

The legal proceedings followed reports in 2018 that the US Department of Justice had requested information from Cemex about a case of alleged corruption in the construction of the Maceo cement plant in Colombia. In 2016 Cemex fired several senior staff members in relation to the Maceo project and its subsidiary’s chief executive resigned. This followed an internal audit and investigation into payments worth around US$20m made to a non-governmental third party in connection with the acquisition of the land, mining rights and benefits of the tax free zone for the project.

India: Several cement producers in Jammu and Kashmir are operating quarries and plants in the vicinity of Dachigam National Park without the mandatory no-objection certification (NOC) from the union territory’s Forest Department. The Deccan Herald newspaper named JK Cement, TCI Cement, Khyber Industries and Green Land Cement as companies that have as yet failed to apply for NOCs for plants in the area. The newspaper alleged political interference in favour of cement producers, publishing state government internal correspondence that gave the distances of Khyber Industries, TCI Cements, Saifco Cements, Dawar Cement, HK Cement and Cemtac Cements plants from the national park as 2.5km, 6.0 km, 3.0km, 6.0 km, 5.0km and 6.0km respectively. According to the source, the true distances are 2.2km, 3.4km, 2.3km, 3.6km, 4.0km and 4.9km and this is part of the state’s support for illegal cement production which constitutes a ‘politician-bureaucrat-cement mafia nexus’ which has enabled private companies to ‘flout norms with impunity.’

Belarus: The Council of Ministers has received a recommendation from the State Control Commission (SCC) that punitive measures be taken against officials responsible for cement production in the midst of another disappointing year. Belapan has reported that members of the SCC blamed the failure to secure efficient performance on untenable costs due to intermediaries. Investigators from the SCC’s Financial Investigations Department (FID) found that Russian intermediaries were selling cement produced in Belarus to Belarusian state-owned companies at a marked-up price. A total of 13 criminal cases have been opened in connection with the findings, including one against an executive of a Belarusian cement company.

In 2013, Belarus completed the modernisation of its three state-owned cement producers, Belarusian Cement, Krasnoselsktroymaterialy and Krichevcementnoshifer to a total capacity of 2.3Mt/yr, at a cost of US$1.1bn. In 2018, the companies missed eight of their 10 key performance targets. Besides cost reduction, capacity utilisation and labour productivity targets were not met.

Elsewhere, Krasnoselsktroymaterialy has tendered for the supply of gas cleaning equipment, including the replacement of bag filters at two of the mills in its grinding facility.

Colombia: Cemex Latam Holdings has denied that it has an office dedicated to illegal activity following accusations of bribery in the local media. In a statement to the Superintendencia Financiera de Colombia, the company said that its Enterprise Risk Management office “supports the decision-making process by anticipating and coordinating risk management that could make it difficult for Cemex to reach its strategic objectives and identify short, medium and long-term opportunities.” It addd that risk management was an institutional process followed by companies around the world to anticipate and mitigate potential business hazards.

Cemex Colombia has been linked by Semana magazine and other outlets to payments to political figures in return for preferential treatment on construction contracts. The cement producer has also faced a long running investigation by local and US agencies into unusual payments relating to its Maceo cement plant project in Antioquia.

Colombia: Cemex Colombia has been accused by the news division of Caracol Televisión of allegedly making payments to the Juan Manuel Santos presidential campaign in 2014 in return for preferential treatment on construction contracts. Santos subsequently won the 2014 presidential election and served until 2018.

Sources, quoted by Noticias Caracol from a US police investigation into the company, say that it paid US$1m in cash and contributed cement to local candidates. They say that the local candidates then sold the donated cement at a discount for additional campaign funds. The Office of the Attorney General of Colombia is also investigating the matter. The report by Noticias Caracol follows an expose by Semana magazine.

Colombia/US: Edgar Ramírez, the former vice president of planning for Cemex in Colombia, has been summoned by the US judiciary in relation to the Maceo cement plant corruption case. Ramírez reportedly fled to the US following calls for his arrest in Colombia earlier in 2018, according to W Radio. Another suspect in the case - Eugenio Correa Díaz, the former representative of CI Calizas y Minerales, which sold the property to the cement producer, is also being questioned by the US authorities. Ramírez and accomplices allegedly paid over US$13m to Correa, despite being aware of the fact that the property was in the process of being expropriated over unpaid taxes.

Pakistan: The Supreme Court has restrained the Punjab Anti-Corruption Department from launching criminal proceedings against the heads of DG Khan and Bestway Cement. The decision was made following a review petition filed by DG Khan Cement, according to the Statesman newspaper. It follows an investigation initiated by the Supreme Court to look into the setting up of cement plants in the Potohar region. The probe alleges government and corporate corruption.

Pakistan: A report issued by the Punjab Anti-Corruption Establishment Lahore (ACE) to the Supreme Court has found irregularities committed by government departments in connection to the setting up of cement plants by DG Khan and Bestway Cement in Chakwal. The investigation followed a probe by the Supreme Court into water usage by cement companies near the Katas Raj Temples, according to the Dawn newspaper. The allegations include a delay by the district government of Chakwal, industries, environment, mine and mineral departments into declaring so-called ‘negative’ areas that would have otherwise prevented the plants being built between 2003 and 2008. Other findings of the report include irregularities into how both companies acquired land and a disregard for environmental protocol.