INVESTIGATIONS

The secret Kazakh bung worrying Airbus

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A French judi­cial inves­ti­ga­tion into sus­pect­ed cor­rup­tion sur­round­ing the sale to Kazakhstan of satel­lites made by aero­space giant EADS, now renamed Airbus Group, has dis­cov­ered the trace of a mys­te­ri­ous pay­ment of 8.8 mil­lion euros made by the group to an off­shore com­pa­ny whose true own­ers are unknown, appar­ent­ly even to Airbus. The inves­ti­ga­tion also cen­tres on the sale to Kazakhstan by EADS of 45 heli­copters, and the deep­en­ing scan­dal impli­cat­ing Airbus in what has become dubbed “Kazakhgate” is joined by sep­a­rate probes in France and Britain into the group’s alleged cor­rupt prac­tices in past sales of its civ­il air­craft. Martine Orange and Yann Philippin report.

Airbus Chief Executive Thomas Enders and three oth­er high-rank­ing man­age­ment fig­ures from the European aero­space group were inter­viewed by French anti-cor­rup­tion police last month in con­nec­tion with the sale to Kazakhstan of satel­lites and heli­copters by the group under its for­mer name EADS.

The sale of the satel­lites built by Astrium (now Airbus Defence and Space) was the first of a series of con­tracts with Kazakhstan signed between 2009 and 2011which includ­ed the sale of 45 heli­copters built by EADS’ France-based divi­sion Eurocopter (now Airbus Helicopters), and 295 loco­mo­tives built by French engi­neer­ing firm Alstom, which alto­geth­er totalled 2 bil­lion euros.

A judi­cial inves­ti­ga­tion into sus­pect­ed “bribery of for­eign pub­lic offi­cials” and “mon­ey laun­der­ing” in the heli­copter deal was launched after evi­dence emerged of secret bungs paid to inter­me­di­aries and French offi­cials con­nect­ed to the sale.

Enders, along with Airbus Chairman Denis Ranque, Airbus Group General Counsel John Harrison and for­mer French min­is­ter Noëlle Lenoir, who sits on an inde­pen­dent pan­el set up ear­li­er this year to advise Airbus on its anti-cor­rup­tion prac­tices, were ques­tioned as “wit­ness­es” by inves­ti­ga­tors from the French police anti-cor­rup­tion and tax fraud office, OCLCIFF, at its head­quar­ters in the Paris sub­urb of Nanterre.

There is no sug­ges­tion that any of the four were involved in the sus­pect­ed cor­rup­tion in the deals under inves­ti­ga­tion. Well-informed sources have told Mediapart that the three mag­is­trates in charge of the judi­cial inves­ti­ga­tion in par­tic­u­lar want­ed to estab­lish the degree of coop­er­a­tion that Airbus would lend their inves­ti­ga­tion.

Airbus Group CEO Thomas Enders who, along with oth­er senior exec­u­tives from the group, was inter­viewed by French anti-cor­rup­tion police as a “wit­ness” in ear­ly October. © Reuters

Much is at stake for Airbus in such dis­cus­sions. The group is sep­a­rate­ly at the cen­tre of inves­ti­ga­tions opened in Britain and France since 2016 into fraud and bribery alle­ga­tions that it paid out secret com­mis­sions worth hun­dreds of mil­lions of euros dur­ing sales of its civ­il air­craft. It has pub­licly recog­nised that it risks a heavy “mon­e­tary penal­ty” at the end of the British and French inves­ti­ga­tions.

The cre­ation ear­li­er this year of the pan­el of inde­pen­dent mon­i­tors of its busi­ness prac­tices, on which sits Noëlle Lenoir, a for­mer French min­is­ter who has served as a mem­ber of lead­ing judi­cial and admin­is­tra­tive bod­ies, the Conseil d’État and the Constitutional Council, was regard­ed as strength­en­ing Airbus’s chances of escap­ing pros­e­cu­tion on even­tu­al cor­rup­tion charges over its jet­lin­er sales by agree­ing to a finan­cial penal­ty set­tle­ment (made pos­si­ble after a recent change in French law, known as “the Sapin 2 law”).

In that inves­ti­ga­tion Airbus is deal­ing direct­ly with the finan­cial crime branch of the French pub­lic pros­e­cu­tion ser­vices, the PNF. The PNF appears keen to use the set­tle­ment process allowed by the Sapin 2 law, as illus­trat­ed ear­li­er this month in an out-of-court set­tle­ment with the HSBC bank after it agreed to pay 300 mil­lion euros after admit­ting mon­ey laun­der­ing and help­ing tax eva­sion. But in the case of the heli­copter and satel­lite sales to Kazakhstan, Airbus must con­vince the inde­pen­dent mag­is­trates in charge of the judi­cial inves­ti­ga­tion to allow such a deal before then nego­ti­at­ing with the PNF.

The probe into the group’s sales to Kazakhstan, con­duct­ed under its for­mer name of EADS, is notably attempt­ing to unrav­el the cir­cum­stances of a mys­te­ri­ous pay­ment of sev­er­al mil­lion euros made by EADS to an off­shore account in con­nec­tion with the satel­lite deal Mediapart can reveal in this inves­ti­ga­tion con­duct­ed with media part­ners France Inter radio and German week­ly mag­a­zine Der Spiegel.

This was first uncov­ered in February 2016, dur­ing a police search of Airbus offices in the Paris sub­urb of Suresnes. The search found evi­dence that in 2009 the group had made a pay­ment of 8.8 mil­lion euros into a Singapore bank account as part of the satel­lite deal. The bank account was in the name of a com­pa­ny called Caspian Corp, reg­is­tered in Hong Kong.

Following the dis­cov­ery, Airbus pro­vid­ed the judi­cial inves­ti­ga­tion with the report of an inter­nal audit the group made in 2015 into its sales cam­paign with Kazakhstan between 2009 and 2011. Mediapart has had access to the report, marked up as “Strictly con­fi­den­tial” and dat­ed July 15th 2015, which reveals that a total of 9.6 mil­lion euros were paid in rela­tion to the satel­lite deal to “two enti­ties linked to Lyès Ben Chedli” who the report describes as a “busi­ness part­ner” for the group. The pay­ments were made up of 800,000 euros trans­ferred into a Swiss bank account in the name of LBC Consulting, a Tunisian com­pa­ny owned by Ben Chedli, and a fur­ther 8.5 mil­lion into the shell com­pa­ny Caspian Corp.

The audi­tors found “sev­er­al ele­ments” that were irreg­u­lar in the pay­ments, and notably that the con­tract with Caspian Corp was signed “with­out respect­ing” the group’s pro­ce­dures. That con­tract was even­tu­al­ly ter­mi­nat­ed in April 2013 after the Caspian Corp bank account in Singapore was closed down on the ini­tia­tive of the bank. The report was con­cerned over the use of “com­plex” con­tract struc­tures involv­ing loca­tions where there was a “high lev­el” of secre­cy.

Caspian Corp itself belonged to a shell com­pa­ny man­aged by front­men and reg­is­tered in the Polynesian state of Samoa. The audit report not­ed that the true ben­e­fi­cia­ry of the com­pa­ny was unknown and that there was no mate­r­i­al evi­dence that it had pro­vid­ed any ser­vices. It rec­om­mend­ed that fur­ther inves­ti­ga­tions should be made in the group to estab­lish “a more detailed under­stand­ing” of the trans­ac­tions and even­tu­al con­nec­tions with those impli­cat­ed in the judi­cial inves­ti­ga­tion in the Kazakh deals.

EADS deputy com­mer­cial direc­tor Jean-Pierre Talamoni (left) with Patokh Chodiev at Saint-Jean-Cap-Ferrat, on the French Rivierra, where the lat­ter has a vil­la, May 7th 2009. © D.R.

But the judi­cial inves­ti­ga­tion was sub­se­quent­ly informed by Swiss bank Lombard Odier, where Caspian Corp also held oth­er accounts, that the own­er of the com­pa­ny was Lyès Ben Chedli. Contacted by Mediapart, Ben Chedli declined to be inter­viewed, insist­ing that he had no involve­ment in the sus­pect­ed cor­rup­tion under inves­ti­ga­tion.

Ben Chedli is a Tunisian busi­ness inter­me­di­ary and con­sul­tant, who has notably worked with Indian steel mag­nate Lakshmi Mittal, and has a wide range of con­tacts, from Mauritanian President Mohamed Ould Abdel Aziz to Bashir Saleh, the for­mer pay­mas­ter of the regime of the late Libyan dic­ta­tor Muammar Gaddafi. During the pres­i­den­cy of Nicolas Sarkozy, Ben Chedli enjoyed close rela­tions with Sarkozy’s chief of staff and lat­er inte­ri­or min­is­ter, Claude Guéant, who he at the time described as a “friend”, and also Sarkozy’s long­stand­ing ally, busi­ness­man Nicolas Bazire.

Patokh Chodiev, an Uzbek oli­garch

In 2008 Ben Chedli met for the first time Patokh Chodiev, an Uzbek oli­garch and joint own­er of the largest min­ing group in Kazakhstan, where Chodiev enjoys close rela­tions with the country’s pres­i­dent, Nursultan Nazarbayev. At the time, Chodiev want­ed to estab­lish a con­tact with the French gov­ern­ment and Ben Chedli pro­posed help­ing him. It was a time­ly moment, as Nicolas Sarkozy, elect­ed as French pres­i­dent in 2007, was keen to deep­en com­mer­cial ties with Kazakhstan, a wealthy Central Asian state.

Ben Chedli intro­duced Chodiev to Sarkozy’s advi­sor on Central Asia, Damien Loras, and also to two high-rank­ing EADS (now Airbus) exec­u­tives, com­mer­cial direc­tor Marwan Lahoud and his deputy, Jean-Pierre Talamoni.

Soon after, Ben Chedli signed a pre­lim­i­nary deal, in the name of his Tunisian com­pa­ny LBC Consulting, with the EADS space divi­sion Astrium to pro­vide his ser­vices for the sale of two of its satel­lites to Kazakhstan. This con­sist­ed of a reg­u­lar month­ly pay­ment of 30,000 euros dur­ing the nego­ti­a­tions, plus a pay­ment of 3% of the val­ue of the final deal to be paid into a dif­fer­ent enti­ty and which would be des­ig­nat­ed when the con­tract was sealed. In all, this rep­re­sent­ed the pay­ment of 9 mil­lion euros.

Singapore no longer felt at ease with the account’

Ben Chedli and Chodiev were to meet on sev­er­al occa­sions in the Kazakh cap­i­tal Astana and also Paris. In July 2009, Chodiev host­ed a meet­ing at his vil­la at Saint-Jean-Cap-Ferrat, on the French Riviera, between Kazakh pres­i­dent Nursultan Nazarbayev, Sarkozy’s Central Asia advi­sor Damien Loras, and the French presidency’s chief diplo­mat­ic affairs advi­sor, Jean-David Levitte. According to a source with close knowl­edge of the events, Chodiev’s skil­ful han­dling of the com­mer­cial rela­tions was a deci­sive fac­tor in the sale of the satel­lites, and the con­tract, worth a total of 300 mil­lion euro, was even­tu­al­ly signed on October 6th 2009 dur­ing a vis­it by Sarkozy to Astana.

France fol­lowed up with fur­ther deals with Kazakhstan, the last of which was the sale of 45 heli­copters built by EADS sub­sidiary Eurocopter, but the back­ground to these would soon take a bizarre turn. Chodiev, was under threat of pros­e­cu­tion in Belgium for con­spir­ing with crim­i­nals and mon­ey laun­der­ing in con­nec­tion with prop­er­ty deals he made in the coun­try, and turned to the French pres­i­den­cy for help in escap­ing tri­al on cor­rup­tion charges in Belgium (see more here).

Kazakh pres­i­dent Nursultan Nazarbayev with then French pres­i­dent Nicolas Sarkozy in Astana on October 6th 2009, the day of the the sign­ing of the con­tract for two EADS satel­lites. © Reuters

Kazakh pres­i­dent Nursultan Nazarbayev with then French pres­i­dent Nicolas Sarkozy in Astana on October 6th 2009, the day of the the sign­ing of the con­tract for two EADS satel­lites. © Reuters

In exchange for France’s help, he offered his own ser­vices in orga­niz­ing the secret pay­ment to the then Kazakh prime min­is­ter Karim Massimov of 12 mil­lion euros to help push through the deals with EADS. It is not known whether EADS ever made the secret pay­ment, and the Airbus 2015 inter­nal audit found no trace of it.

The plan also involved a secret 5-mil­lion-euro kick­back from the deal which was to be paid to ben­e­fi­cia­ries in France, organ­ised by Chodiev and trans­port­ed to Paris in cash from abroad by car.

Meanwhile, Lyès Ben Chedli was to become oust­ed from the deal­ings with Kazakhstan after dis­agree­ments report­ed­ly devel­oped with both the Sarkozy admin­is­tra­tion and also Chodiev.
In April 2010, Airbus signed a con­tract with Caspian Corp for the pre-agreed bonus pay­ment to Ben Chedli of 3% of the val­ue of the com­plet­ed satel­lites deal. The con­tract was man­aged by EADS sales and mar­ket­ing exec­u­tives Jean-Pierre Talamoni and Olivier Brun. Their Paris-based depart­ment, known as the SMO, was wound down by Airbus in 2016 fol­low­ing the emer­gence of evi­dence of cor­rupt prac­tices by the group.

Airbus paid a total of 8.8 mil­lion euros to Caspian Corp in sev­er­al stages. However, in May 2014 the plot sud­den­ly thick­ened when Ben Chedli brought a case before the Paris com­mer­cial court against Airbus alleg­ing that he had nev­er been paid the agreed amount. That sug­gest­ed that either Chedli was attempt­ing to be paid twice, or that Airbus had paid unknown ben­e­fi­cia­ries behind Caspian Corp.

Hong Kong com­pa­ny reg­is­tra­tion doc­u­ment show­ing the Caspian Corp was owned by a Samoa com­pa­ny called CLD Nominee, whose eco­nom­ic ben­e­fi­cia­ries are unknown. © D.R.

The ongo­ing judi­cial inves­ti­ga­tion into the Kazakh deals ques­tioned Laurent Pictet, the per­son in charge of the Caspian Corp account with Swiss bank Lombard Odier, based in Geneva, who con­firmed that Ben Chedli was the own­er of the accounts. “The start­ing point of the bank­ing rela­tion­ship is due to the fact that Mr Ben Chedli, via his com­pa­ny Caspian Corp […] signed a con­tract with EADS,” Pictet said in his state­ment to the French inves­ti­ga­tion and seen by Mediapart. “Mr Ben Chedli had a con­tract as a busi­ness con­trib­u­tor which stip­u­lat­ed that he was paid 3% of the sale [price] of the satel­lites to Kazakhstan […] The eco­nom­ic ben­e­fi­cia­ry of Caspian was Mr. Ben Chedli. It seems to me also that he was the unique share­hold­er.”

In March 2009, dur­ing the ini­tial manoeu­vring for the deals with Kazakhstan, Ben Chedli in fact cre­at­ed three off­shore com­pa­nies. One was Caspian Corp which was reg­is­tered in Hong Kong through the ser­vices of Portuguese law firm Mazars. Another was Talyo Technologies which was reg­is­tered in Panama, and the third was Eurasian Technologies reg­is­tered in the Seychelles, both of which were set up with the legal help of Panamanian law firm Mossack Fonseca.

Ben Chedli opened bank accounts for the three com­pa­nies in Switzerland, and also for his Tunisian com­pa­ny LBC Consulting. He also sub­se­quent­ly request­ed that Lombard Odier open a sec­ond account for Caspian Corp at its sub­sidiary in Singapore. “That is because Mr Ben Chedli told us that EADS had refused to pay the com­mis­sion into a Swiss account,” Pictet told the French inves­ti­ga­tion, adding that he had cor­re­spond­ed with the per­son in charge of pay­ments to inter­me­di­aries for the SMO depart­ment, Olivier Brun, “to con­firm the exis­tence of the con­tract and more par­tic­u­lar­ly about the mon­ey pay­ments”.

In his state­ment, Pictet described his bank’s rela­tion­ship with Ben Chedli as “four years of dis­as­ter”, and said that the Tunisian emp­tied the account which had been opened orig­i­nal­ly by the bank on the under­stand­ing it was to be man­aged as a wealth invest­ment account. “On sev­er­al occa­sions we gave him warn­ings by email or let­ter indi­cat­ing that we no longer agreed to car­ry out pay­ments traf­fic. It involved pay­ing pri­vate jets, cars, jew­ellery and to pay the month­ly bills on his cred­it card, which involved crazy sums.”

Pictet said that because “Mr Ben Chedli nev­er respect­ed any­thing” the bank’s Geneva office ran into prob­lems with its rep­re­sen­ta­tives in Singapore. “We nev­er stopped send­ing him warn­ings, up until the day there was noth­ing left,” he said. “We were watch­ing it very close­ly because we didn’t want to pay retro-com­mis­sions [secret pay­ments made from oth­er secret pay­ments]. So we mon­i­tored the pay­ees […] Most of the pay­ments were made by cred­it card.”

Given what Mr Ben Chedli was doing, Singapore con­tact­ed me to say they no longer felt at ease with the account and they pro­ceed­ed to close the account, noti­fy­ing the client by let­ter.”
Among the ques­tions raised by the banker’s tes­ti­mo­ny is whether Caspian Corp could have been set up to serve Airbus in order for it to dis­creet­ly remu­ner­ate oth­er peo­ple con­nect­ed to the trade deals in Kazakhstan.

Meanwhile, Lyès Ben Chedli lost his case brought against Airbus at the Paris com­mer­cial court. He did not sub­se­quent­ly make use of a clause in the con­tract signed with EADS (renamed Airbus Group) which allowed for an arbi­tra­tion pro­ce­dure.

Contacted by Mediapart, nei­ther Airbus nor Lyès Ben Chedli accept­ed to be inter­viewed about the events report­ed here. In response to our request for an inter­view, Lyès Ben Chedli wrote to Mediapart by email: “I quite sim­ply do not wish to make any state­ment in a so-called ‘Kazakhgate’ affair which does not con­cern me, nei­ther near nor far.” He insist­ed that he had no involve­ment in “acts of cor­rup­tion that the ones and the oth­ers are accused of”, and warned that he would take legal action if “false or erro­neous” infor­ma­tion about him was pub­lished.

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The secret Kazakh bung wor­ry­ing Airbus

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