Canada-owned mining company under investigation in Romania
Tuesday, December 10, 2013 at 8:08AM
Richard L. Cassin in Canada, Dadok Interprest SRL, ENRC plc, Gabriel Reources, Marcel Pavaleanu, Minvest Deva, RMGC, Romania, Rosia Montana Gold Corporation, Serious Fraud Office, Tax Evasion, money laundering

Prosecutors in Romania launched a criminal investigation into foreign-controlled Rosia Montana Gold Corporation (RMGC), the company operating the largest open-pit gold mine in Europe. The investigation is focusing on money laundering and tax evasion, according to a report by the Organized Crime and Corruption Reporting Project here.   

Gabriel Resources of Canada owns 80% of RMGC, and state-owned mining company Minvest Deva holds nearly 20%.

RMGC allegedly paid more than $300,000 to Kadok Interprest SRL, which prosecutors say is ‘a phantom company used by a network of organized criminals from the Romanian city of Ploiesti.’ Prosecutors discovered the payments from RMGC three weeks ago during an investigation of Marcel Păvăleanu, an advisor to the Romanian government.

The mining sector has been under scrutiny in the U.K. and U.S. In April, the U.K. Serious Fraud Office launched a criminal investigation of London-listed mining company ENRC plc. 'The focus of the investigation is allegations of fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa,' the SFO said.

Another mining company with operations in Africa was named in an overseas bribery investigation underway in the U.S. The DOJ said this year that a grand jury was investigating whether BSG Resources -- the mining operation of Israeli billionaire Beny Steinmetz -- paid bribes to win mining rights in the Republic of Guinea. A French citizen, Frederic Cilins, was arrested in New York and charged with trying to obstruct the federal investigation into BSG.

Another Israeli tycoon with Africa mining operations has been tied to the U.K.'s ENRC.

In Romania, lawyers for RMGC said they understood that none of the company's employees or management were the direct target of prosecutors.

Thousands of Romanians have been protesting RMGC's open-pit mining project for three months, saying it's environmentally risky and tainted by political corruption, reports said.

_____________

Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
See website for complete article licensing information.