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High-level corruption cases in the Western Balkans and Turkey

Selling shares in the Albanian Refining and Marketing of Oil (ARMO) Company - High-level corruption cases in the Western Balkans and Turkey

Selling shares in the Albanian Refining and Marketing of Oil (ARMO) Company

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Introduction

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).