A Swiss subsidiary of Polish state energy giant Orlen has revealed details of the roughly $400 million (1.6 billion zloty) it lost on prepayments made without collateral under the firm’s previous management for Venezuelan crude oil and petroleum products that were never delivered.
Orlen Trading Switzerland (OTS) reported that over half the money was paid to a Dubai-based intermediary run by a 25-year-old from Hong Kong. The firm says it has notified prosecutors regarding the actions of the former management in relation to the case.A Swiss subsidiary of Polish state energy giant Orlen has revealed details of the roughly $400 million (1.6 billion zloty) it lost on prepayments made without collateral under the firm’s previous management for Venezuelan crude oil and petroleum products that were never delivered.
Orlen Trading Switzerland (OTS) reported that over half the money was paid to a Dubai-based intermediary run by a 25-year-old from Hong Kong. The firm says it has notified prosecutors regarding the actions of the former management in relation to the case.Orlen first announced on 10 April that $400 million allocated to unfulfilled deliveries needed to be written off as a loss in their financial statement for 2023. However, no details of the deals were given until today’s statement.
The firm also today confirmed that it has cancelled the contracts to buy the oil, reports the Polish Press Agency (PAP). However, the new management added that no traces of Iranian or Russian oil—about which the media have speculated in recent weeks—have been found in company documents.Orlen’s press office confirmed that a notice has been submitted to the public prosecutor’s office regarding the actions of the group’s former management with regard to OTS. It said it was also conducting an internal audit of operations.
OTS was founded in August 2022, a few months after the outbreak of war in Ukraine and a crisis in the energy market caused by the implementation of sanctions on Russia. The company is based in Switzerland, which is known for its looser regulation of commodity trading.Earlier this month, Prime Minister Donald Tusk said that “there are legitimate concerns that Poland will be exposed to very serious trouble in connection with the activities of [OTS]”.
Tusk also accused his predecessor Mateusz Morawiecki, who headed the former Law and Justice (PiS) government that left office in December, of ignoring the problem “despite warnings”. Orlen’s former CEO, Daniel Obajtek, who was fired on 1 February this year, had close ties with PiS.Orlen is also being investigated over accusations that, during Obajtek’s tenure, it artificially lowered fuel prices to boost PiS’s re-election campaign and that it sold assets to Saudi Aramco at billions below their value.
However, according to a former member of Orlen’s board, Michał Róg, who was among those removed earlier this year as the new government made changes at state-owned firms, it was the decision to change OTS’s management in February 2024 that was the real reason behind the problems with its oil contracts.
“Advance payments were made on these transactions, which is a standard action in international trading,” Róg told PAP earlier this month. “Orlen’s then acting board had knowledge of the amount of these prepayments and open trades and knowingly took the financial and business risks associated with the dismissal of OTS’s board.”Obajtek himself also told broadcaster Radio Zet that the allegations against Orlen and OTS are “total nonsense”. Like Róg, he said it was “irresponsible to suddenly fire the entire management board of the company”.
Source:https://notesfrompoland.com