Selling shares in the Albanian Refining and Marketing of Oil (ARMO) Company
More resultsIntroduction
In February 2008, the Albanian government sold 85 per cent of the shares in the Albanian Refining and Marketing of Oil (ARMO) Company to Anika Mercuria Refinery Associated (AMRA) Oil, a consortium of three companies managed by Rezart Taçi, alleged to have ties to Prime Minister Sali Berisha (see here and here).
- Country
- Albania
- Sector
- Energy and natural resources
- Offence
- Abuse of power
- Phase
- Prelim. investigation
Description of the case
In February 2008, the Albanian government sold 85 per cent of the shares in the Albanian Refining and Marketing of Oil (ARMO) Company to Anika Mercuria Refinery Associated (AMRA) Oil, a consortium of three companies managed by Rezart Taçi, alleged to have ties to Prime Minister Sali Berisha (see here and here).
AMRA failed to fulfil its investment pledges, and – according to an audit report by Deloitte Albania – the company’s debts to the Albanian tax authorities came to more than US$73 million whilst debts to third parties came to more than US$100 million. The assets of the refinery had been collateralised as part of loan agreements with Albanian and foreign banks (see here).
In August 2013, Taçi sold all of AMRA’s stake in ARMO to Heaney Assets Corporation, which subcontracted the company’s operations to Deveron Oil and Trading Petrol & Drilling (TP&D). In 2016, a report from the Albanian Ministry of Energy and Infrastructure revealed that ARMO had accumulated debts of US$595 million. The debts included unpaid taxes, salaries for 1,170 employees, outstanding payments to suppliers and third parties, and loans underwritten by collateralising the company's assets. The General Directorate of Taxation and Credins Bank filed an asset seizure request with the Local Asset Registration Office. The office executed a court order in favour of Credins, and the bank confiscated the assets of the indebted company. According to a December 2016 report by the Ministry of Justice, Credins Bank reacquired full ownership of the assets because of a series of irregularities regarding the notification of interested parties in the assets and the distribution amongst the beneficiaries of the financial proceeds from the sale (see here and here).
Before Credins completed the buyback in October 2016, it had arranged an investment and operation agreement with Ionian Refining and Trading Company (IRTC) in August. IRTC CEO Besnik Sulaj is alleged to have ties to Albanian Prime Minister Edi Rama. In addition to the alleged political ties of ARMO’s major stakeholders, the Ministry of Energy, which holds a “golden stake” in the company, did not act to prevent the company’s mismanagement and eventual bankruptcy (see here and here).
Applicable corruption offence
Abuse of functions; embezzlement and destruction of business
Other laws breached
- Law No. 33/2012 on immovable property registration
- Law No. 9920, dated 19 May 2008, on tax procedures in the Republic of Albania (amended)
- Code of Civil Procedures of the Republic of Albania
Suspects' institutional affiliation
Prime Minister's Office; Ministry of Economy, Trade and Energy (Ministry of Energy and Infrastructure); Ministry of Economy and Finance
Date of offending
From 2009 to 2016
Sector affected
Energy & natural resources
Related developments
After the general elections of June 2013, the centre-right Democratic Party led by Sali Berisha lost power to the centre-left coalition led by Edi Rama. In August 2013, Rezart Taçi sold his stake in ARMO to Heaney Assets Corporation. Taçi's activities were under investigation by the Albanian State Police’s Directorate of Economic and Financial Crime. In December 2013, the directorate filed charges for tax evasion, fraud, forgery of official documents, undeclared income and money laundering with the Tirana District Prosecutor’s Office. In 2018, Taçi was found not guilty in the ARMO case (see here, here, here and here).
Court
N/A
Related domestic or foreign cases
In January 2016, Taçi was indicted in Tirana District Court for tax evasion as the administrator of ARMO. In early May 2016, he was arrested in Switzerland on fraud charges, but was later freed. Meanwhile, in Albania, the Tirana District Court found Taçi guilty on 22 December 2016 and fined him ALL60 million (€390,000). The sentence was appealed in January 2017, and he was found not guilty on 12 September 2017. He was again found not guilty by the Tirana Court of Appeals in October 2019 after having been found guilty of tax evasion by the Tirana District Court (first instance).
Regarding foreign cases, 16 officials from the International Bank of Azerbaijan, which had authorised a 75 million euro loan to Taçi, were imprisoned in Azerbaijan (see also here).
On 23 February 2018, the Regional Directorate for Large Taxpayers filed suit in the High Court against TMK Ltd., the bailiff service contracted by Credins Bank, and requested the invalidation of procedures followed to change the ownership of ARMO's assets to Credins Bank. The High Court is not working because of the ongoing justice reform process in Albania, so the case has not progressed since its submission.
Current phase of the case in criminal procedure
In 2018, the Serious Crime Prosecution Office started an investigation in the ARMO case. ARMO changed ownership frequently between 2009 and 2018. The purpose of the investigation is to determine the legality of procedures followed in the change of ownership process, the company’s debts, the activities of its owners and their subsidiaries, and the role of government regulators. The investigation is ongoing (see also here).
Procedural history
Under investigation
Obstacles
The case is quite complex and spans almost ten years. Additionally, there is a transitional period in the Albanian justice system because of ongoing justice reforms that have affected the personnel in all institutions in the justice system (see also here).
Resolution of the case
Under investigation
Applicable minimum and maximum penalty
It remains unclear as the case is currently under investigation.
Charges pressed by the prosecutor in the actual case (including the penalties requested)
N/A
Sanctions imposed
N/A
Sanctions enforced
N/A
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