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November 23, 2022

After DIICOT prosecutors froze Petromidia refinery’s assets in the “Rompetrol 2” Case, KazMunayGas to start legal action against Romania

KazMunayGas, Kazakhstan’s state oil and gas company, has started legal proceedings against Romania after Directorate for Investigating Organised Crime and Terrorism (DIICOT) prosecutors placed a levy upon Petromidia refinery’s assets, as part of a criminal case that concerns the way the refinery was privatised, thus disrupting the company’s plans to sell a package of KMG International (formerly Rompetrol Group) shares to a Chinese company, Financial Times informs.

The Kazakh Group has sent to the Romanian Government a notice of investment dispute, the first step in an international arbitration case. The Kazakh Group had threatened to do so after prosecutors froze Petromidia refinery’s assets in the “Rompetrol 2” Case.

At the end of April, KMG, Kazakhstan’s state oil company, announced the sale of a 51 percent stake in KazMunayGas International, the company that owns the Petromidia refinery in Romania, to China Energy Company Limited (CEFC), for USD 680 M.

Just a few days later, in early May, DIICOT froze the assets of Petromidia refinery, KazMunayGasInternational NV, SC Oilfield Exploration Business Solutions SA and SC Rompetrol Rafinare SA, in view of recovering the sum of RON 1,724,168,8245, USD 290,786,616 and EUR 34,941,924, in the “Rompetrol 2” Case.

KazMunayGas rejected the DIICOT prosecutors’ accusations, pointing out that it bought the refinery in 2007, several years after the privatisation, and the transaction was approved by Romanian authorities.

“This case has nothing to do with us,” said deputy general manager of KazMunayGas, Daniyar Berlibayev.

DIICOT has announced that the value of frozen KMG assets and shares totals RON 3 bln (EUR 740 M), this being the estimated damage caused by the illegal activities that the former owners allegedly carried out with the complicity of Romanian officials. On the other hand, Mediafax points out, KMG announced that the value of the frozen assets stands at USD 2.1 bln.

According to the agreement between KazMunayGas and China Energy, the deal that would see the Chinese company in possession of a controlling stake should be completed in October.

Deputy Premier and Economy Minister Costin Borc recently stated on Digi24 that the DIICOT prosecutors’ investigation into the case concerning Petromidia refinery’s sale to KazMunayGas will not block the sale of a controlling stake to Chinese Energy Company.

The Economy Minister also stated that he received assurances in this sense from the Justice Minister.


KMG International Vice President on transcripts of Basescu-Blejnar talks on recovery of arrears: “State’s involvement went beyond commercial limits”


The transcripts of the phone talks that President Traian Basescu and Romanian Tax Authority (ANAF) Director Sorin Blejnar had in 2010 – talks that Blejnar admitted as genuine during last Friday’s hearings at the DIICOT – show “the authorities’ influence in a dispute that is no longer solely commercial,” KMG International Senior Vice President Azamat Zhangulov (photo) stated for ‘Adevarul’ daily.

“Romanian authorities can’t change the rules in the middle of the game,” Azamat Zhangulov said. “These transcripts need no further explanation; their content is very clear. But what is more important for me is that they prove the authorities’ influence in an issue that is no longer solely a commercial dispute. The Romanian authorities are trying to change the rules in the middle of the game – something that is not possible. The state’s involvement in this issue went beyond commercial limits but I hope things will not be the same this year,” KMG International Senior Vice President Azamat Zhangulov explained.

Azamat Zhangulov also stated the transcripts were not legally or officially published and such information should not have been leaked to the press. “If you’re asking me if it’s normal or not, I’ll say that I don’t believe it is, such a conversation should not have been recorded or published,” he said, even against the backdrop in which the transcripts point to the involvement of ex-president Traian Basescu in the management of the 54 million that Rompetrol had paid to ANAF.

The KMG International Senior Vice President added that the rule of law has not been respected in this issue: “You can’t record people’s conversations without them knowing about it, but you can’t squeeze companies of all of their earnings either. You can’t act like this.”


Former ANAF Director Sorin Blejnar heard by DIICOT prosecutors on Friday


Former ANAF Director Slorin Blejnar explained before DIICOT prosecutors his overtures to recover the arrears that Rompetrol allegedly owed to the state. He also gave details on the intercepted phone talks in which he and Traian Basescu were talking about this.

Blejnar was heard at the DIICOT last Friday, as a witness, in the “Rompetrol 2” Case in which 14 persons are being probed for manipulating the capital market, embezzlement, malfeasance in office, tax evasion and money laundering. Former ministers Dan Ioan Popescu, Mihai Tanasescu, Sebastian Vladescu and Gheorghe Pogea are among them.

According to judicial sources, DIICOT prosecutors wanted to find out from Sorin Blejnar what he did in his capacity as ANAF Director in order to recover Rompetrol’s arrears. Sorin Blejnar’s hearing brought back to the limelight several transcripts included in one of the cases in which he has been indicted. The transcripts concern several phone conversations that Blejnar had with Traian Basescu.

According to judicial sources quoted by stiripesurse.ro, the former ANAF Director told prosecutors that he is very upset and disappointed with the DIICOT Brasov prosecutors’ decision to include in the case file several transcripts of conversations he had with Traian Basescu.

Sorin Blejnar was director of the Romanian Tax Authority (ANAF) from 2009 to 2012. On June 9 this year, he was sentenced to 5 years in prison, executory sentence, in the “Diesel Oil” Case, a case in which he was charged with tax evasion. The Court of Appeals ruling is not final.


Gov’t Spokesperson: KazMunayGas sends notification of consultations to Government; international arbitrage not yet


KazMunayGas sent the Government on July 25 a notification demanding the start of consultations with the Romanian state in the matter on the lien placed on the company by judiciary authorities, the Government’s spokesman Liviu Iolu said in a Wednesday’s briefing at Victoria Palace.

The Government’s spokesman also said that Prime Minister Dacian Ciolos had discussed, in Mongolia, with Kazakhstan’s Prime Minister Karim Massimov also about Rompetrol.

“The issue of Rompetrol was raised by Kazakh Prime Minister, but they did not go into detail. (…) The Romanian prime minister said that currently he could not influence the Romanian state, the judicial authorities and the ongoing investigation of prosecutors,” explained Iolu.

He also referred to the memorandum on Rompetrol, stating that the Ministry of Energy has a timetable for its implementation.

“Romania is using its governmental power to undermine a transaction and re-nationalize assets,” reads the letter sent to the Romanian Government.



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