U.S. authorities are investigating former President Peña Nieto for bribery

Former Mexican President Enrique Peña Nieto

is being investigated by U.S. authorities for alleged bribery in the selling and buying operation of Fertinal , a fertilizer plant purchased by Pemex in 2015.

According to the documents delivered to the U.S. Justice Department and the Securities and Exchange Commission by a “source” under under penalty of perjury , Peña Nieto allegedly received bribes in order to “authorize” the purchase of the fertilizer plan t with a surcharge that damages the assets of the state-owned oil company and the public treasury .

EL UNIVERSAL

queried the Securities and Exchange Commission in regards to the investigation but it declined to comment.

Peña Nieto

is mentioned in the documents several times and the source claims the former President gave his “approval,” in exchange for bribes , for the former Pemex director, Emilio Lozoya , to pay U SD $635 million for Fertinal when “this company was effectively bankrupt , with a debt of hundreds of millions of dollars.”

Consultancy firms PricewaterhouseCoopers (PwC ) and Binder Dijker Otte (BDO) , as well as Mexico's Supreme Audit Office , warned that Fertinal was bankrupt as it had a debt of USD $264 million and only had USD $12,000 in cash funds.

The fertilizer plant was in such state that a year after the acquisition, the head of Pemex Fertilizers, Juan Alfredo Lozano Tovar , said that “the acquisition of Fertinal was consolidated, receiving the company in a liquidity crisis state , with a negative working capital, and in an imminent risk of bankruptcy , which will generate a negative EBIT ” during a session of the Administrative Council on September 2016. The former official added that it was necessary to implement an emergency plan to lower costs.

Even then, Emilio Lozoya was authorized to acquire the fertilizer plant by Peña Nieto and give Fertinal USD $50 million for the distribution of dividends, previous to the buying and selling operation.

“The excessive payment was possible thanks to the approval of the transaction, through bribery to Peña Nieto , paid for by Italian businessman Fabio Massimo Covarrubias Piffer, the majority shareholder at Fertinal , using the 470 trust that was created to formalize the buying and selling operation. This was the mechanism through which the bribes were paid,” argued the whistleblower on their statement to the Securities and Exchange Commission .

Covarrubias Piffer

is said to be one of the favorite businessmen of the previous administration.

According to the source, there is another powerful businessman involved in the alleged fraud at Pemex : Ricardo Salinas Pliego , the president o f Grupo Salinas . The Mexican businessman was a shareholder at Fertinal and Banco Azteca , owned by Salinas Pliego, was Fertinal's main creditor but at the same time, it was one of its beneficiary owners .

“This is banned by Mexican bank laws and probably, as a result of this ban, ( Salinas Pliego ) concealed his status as a shareholder .”

The whistleblower “reasonably believe that the participation of shareholders in Fertinal was carried out through an entity called NPK Holding, AB , and Base Rock, BVBA ”.

In fact, the source claims that it had a close relationship with the people ( Salinas Pliego ) appointed as his proxies in order to conceal his status as a shareholder , among them are:

1. His personal lawyer, Jorge Cervantes Trejo de González Calvillo

2. Felipe Fernández Barrera , his former representative at Iusacell , now AT&T México

3. Everardo Joaquín Espino Guerrero , a lawyer with legal power at NPK Holding, AB

4. Francisco Flores Meléndez , a proxy and the representative of NPK

Dividend payment

In the minutes from the Ordinary General Assembly of Fertinal shareholders , which took place on September 2015, it is mentioned that the main shareholders are Banco Azteca , with 99.9999997% and NPK Holding, AB with 0.0000003%.

During that meeting, the shareholders agreed the approval of dividend payments for MXN $871,500,000, almost USD $50 million.

Banco Azteca

would receive over MXN $871 million and KPK Holding, AB would receive MXN $0.26.

A month later, during an Extraordinary Session of Pemex's Administration Council , which took place on October 2015, the acquisition of Fertinal and its subsidiaries was approved with an investment of USD $635 million, through Pemex 's credit lines from Nafin and Bancomext .

Additionally, in the same credit line, Pemex obtained USD $425 million to liquidate Fertinal 's debts. Pemex would have 16 years to pay both loans .

According to official documents, the first financial movement authorized was to give Fertinal MXN $50 million, the same amount the fertilizer company agreed to grant its shareholders as a dividend payment .

U.S. authorities

have documents from the transaction of Fertinal, which include information about bank accounts that were used to pay bribes , and also specifies the amounts paid.

Corruption abroad

The Justice Department and the Securities and Exchange Commission claim that the selling and buying operation of Fertinal is liable to the Foreign Corrupt Practices (FCPA) because Pemex is listed in the U.S. stock market and the private investors are concentrated in its jurisdiction.

This means that since Pemex is listed in the U.S. stock exchange , Pemex is bound to U.S. laws and the Securities and Exchange Commission is in charge of enforcing the law.

The Foreign Corrupt Practices imprisons those who corrupt a public servant at the expense of the company and its investors.

In this case, the alleged bribes paid to Peña Nieto are being investigated because they represent a possible damage to the assets of Pemex and its bondholders .

Also, according to the whistleblower , the U.S. bank system was used to facilitate the payment of bribes .

Until now, the investigation is centered around those involved in the operation and who used the U.S. stock market and bank system to obtain personal benefits, outside the law:

1. Enrique Peña Nieto , Mexico's former President

2 . Emilio Lozoya Austin , the former Pemex director

3. Fabio Covarrubias Piffer , the main Fertinal shareholder

Therefore, the Securities and Exchange Commission is creating a detailed report about the alleged irregularities in the selling and buying operation of Fertinal , called “ Kimora Project ”, which will be sent to the Mexican government.

Peña Nieto

denies all the accusations.

Emilio Lozoya

is at large.

Former Pemex director is accused of money laundering, fraud, and bribery

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