English
• Lev Leviev, a leader on the world diamond market, built the huge AFI Cotroceni mall
• The controversial Israeli businessman Leviev, whose companies are accused of committing human rights abuse in Angola, is a close friend of Angolan dictator Jose Eduardo dos Santos
• After taking over the business in Bucharest, the Israeli magnate financed the current governing party, PD-L
The trail of the money used to build the largest mall in Romania - AFI Palace Cotroceni - leads one to Angola, where hundreds of workers are looking for diamonds with guns held to their heads.
The business in Bucharest is just another source of income which feeds the accounts of a controversial Israeli billionaire - Lev Avnerovich Leviev -, one of the most important players on the world diamond market, whose companies are accused of subjecting the African natives to inhuman treatment.
• The lord of diamonds enters the Romanian market in full force
Lev Leviev entered the Romanian market at full strength four years ago.
But he made his greatest deal in 2007, when he took over Cotroceni Park, the company through which he developed one of the largest retail centers in Eastern Europe - AFI Palace Cotroceni, inaugurated last year.
The magnate does not officially appear as a shareholder in any of the companies registered in Romania, but through his dummy corporations he controls several companies headquartered in Bucharest, operating in the real estate and hospitality sector. The turnover of Leviev"s Romanian businesses amounts to hundreds of millions of Euros.
• Business model
Through AFI Europe NV, registered in Amsterdam and officially acknowledged as being the flag-company of the Africa Israel group, Lev Leviev is a shareholder in nine companies that reside in Romania: Star Estate, Europe Logistic, Veroskip Trading, Tulip Management, Plaza Arad Imobiliar, Roi Management, Premier Solutions & Team, AFI Europe Management and King Garden, all of them operating in real estate, more specifically in letting and subletting office buildings. All of the nine companies were set up between 2006 - 2007, when the real estate in Romania was booming.
Through his company Tulip Management, Leviev developed a gigantic glass and steel 14-story tower, on the Tudor Vladimirescu street in Bucharest, which now serves as the "headquarters" of his companies that reside in Romania.
Another company, Star Estate SRL, owns 10 hectares of land in Voluntari, where three years ago it planned to build a residential complex. For now the project has been put on hold.
Leviev planned to create malls similar to the one in Bucharest in Ploieşti and in Arad.
On December 22nd, 2009, Veroskip Trading requested from the Agency for the Environmental Protection of Ploieşti the approval to change the intended use of a plot of land in Ploieşti from "industrial" to "commercial".
What"s more, in the beginning of 2009, Veloskip had demanded from the mayoralty of Ploieşti the permit to pull down the "administrative buildings" which occupied part of the plot of land. With a total surface of 40,000 square meters, the plot of land bought in 2007 previously hosted the former cast iron plant Flacăra- Ploieşti.
The goal of the purchase: to use the land to build a commercial center, an office building and several luxury residences.
With a similar objective, Leviev used another company, Europe Logistic, to acquire over 10 hectares of land in the heart of the city of Arad.
The land, part of a former industrial platform, hosted the oldest furniture factory in the city, IMAR, created in 1890.
Just like in Ploieşti, the land was supposed to be used for the construction of a mall and an office building. The inauguration of the smaller scale replicas of AFI Palace Cotroceni mall of Bucharest was scheduled for the beginning of this year, but it was delayed to financial issues.
• The Cotroceni Park company
The Cotroceni Park business was created six years ago, as a spin-off of the company IMSAT, which transferred the 12 hectare plot of land located on the Timişoara boulevard to the new company. The new company Cotroceni Park also took on the USD 350,000 debt that IMSAT owed to American fund Broadhurst Investment, represented in Romania by Siminel Andrei.
Through spin-offs and several share capital increases, the investment fund ended up becoming a majority shareholder that owned 97%, and then the shares of the fund were transferred to a Cyprus-based company called Cotroceni Investment Limited (CIL), which shares its headquarters in Cyprus with Broadhurst.
Lev Leviev used CIL to acquire the company from the Cyprus based division of Broadhurst.
It was rumored at the time that the amount paid in the transaction was almost 80 million Euros, which would make it an extremely lucrative deal for the American investment fund, one of the largest players on the Romanian real estate and stock market.
Cotroceni Park, which is currently owned by Lev Leviev, sponsored the PD-L (Democratic Liberal Party) with 95,000 lei, and was one of the largest official sponsors of the party in 2008.
Cristian Poteraş, the mayor of the 6th district of Bucharest, where the mall is located, is a member of the PD-L.
In order to develop the commercial complex, the company Cotroceni Park took out a loan of up to 234 million Euros, guaranteed with a first lien mortgage on its properties.
• The recipe for success
Angola is the fifth largest producer of diamonds in the world and one of the largest oil producers in Africa.
The gems located in mines and in its riverbeds make the foreign companies which exploit them 1 billion dollars richer every year.
Angola"s resources help others live the fine life.
• The curse of the natural resources
In Angola however, people live in terrible conditions.
The state gets a royalty of less than 10% of the profit that diamond companies make its years.
Almost 85% of the country"s economy is based on subsistence agriculture.
The authorities do not have the money needed to exploit all of their oil deposits, and 90% of the extracted oil gets exported.
One in three children dies before turning five years old due to the primitive medical system.
Two out of three families live on less than two dollars a day.
The only locals that get to touch a diamond are those who work for the foreign companies that have concessioned the riverbeds and mines where the gems are found. They dig the earth by hand and are watched over by armed security guards, that regularly beat them as a preemptive measure.
The officials of the companies of Leviev have always denied these allegations.
Jacques Zimmerman, the spokesperson of Leviev, claims that there is no connection between the companies that the magnate owns in Angola and security firm K&P Mineira: "Neither Luminas, nor any other company owned by Mr. Lev Leviev are responsible for these despicable acts. Mr. Leviev has always condemned this kind of actions".
The managers of Lev Leviev Group of Companies (LLGC) deny all the accusations made in the report made by journalist Rafael Marques (see below) by invoking the investments their companies made in Angola and the benefits the companies provide to the African population.
In an official press release, LLGC mentions that the businesses of the magnate had raised the living standard in Angola, that they have developed a method to cut back on diamond traffic that financed the paramilitary groups involved in the civil war, that it has made numerous donations to the hospitals and schools in the area and that all the companies owned by Leviev strictly honor the human rights and dignity.
• Bucharest - Luanda correspondence
Journalist Rafael Marques de Morais still lives in Angola.
His obstinacy in fighting against the regime of president Dos Santos and foreign exploiters cost him his freedom, but also the international recognition of human rights associations.
Mauricio Lazala, the president of the Latin America and Middle East Department of the Center for Business Resources and Human Rights in London, has closely backed his actions. More to the point, the organization he works for helped Marques publish the report "Operation Kissonde - The Diamonds of Humiliation and Misery" which describes the abuse of Angola.
"Rafael Marques is a remarkable freelance journalist, who won many awards", Lazala explained. He confirms the revelations of Marques about the Angolan operations of diamond and oil companies, including those owned by Lev Leviev: "In their replies, none of the companies (ed. note: accused of abuse) denied that the information in the report was true. Only some of them contested their involvement in the some of the incidents".
• "A big lie."
The Angolan journalist was outraged when he heard that Jacques Zimmerman, Leviev"s spokesperson, claims that there is no connection between Luminas and security company K&P Mineira: "It is a big lie. Luminas hired K&P Mineira to guard their mining concessions", said Marques.
He gathered information on location: "I saw, just like the report said, some of the guards of K&P tying several workers right in the center of the area where Luminas is located. According to the law, the exploiting company is required to ensure the security of all the concessioned land. These rules must comply with the laws of the state. A large number of natives were tortured on the proper of Luminas and were forced to work for the company, which makes the latter a major human rights abuser", the journalist says.
His investigations revealed an entire network that allows Leviev to receive a preferential treatment on the territory of Angola.
Rafael Marques de Morais revealed: "Another company that we mentioned in the report, Brazilian Odebrecht, decided to hire a human rights expert that would improve and streamline the operations of the security companies and take steps to reduce abuse. Since Luminas relied on the support of former head of the Armed Forces of Angola, general Antonio Franca - a shareholder of the company - and on the relationship that Lev Leviev had with the Angolan president, it behaved as if it was exempt from obeying such rules".
• The state, the best business partner
The partnership between Lev Leviev and the Africans was cemented by several projects, developed on the ruins of the monopoly of diamond giant DeBeers.
In 2000, the company founded by Cecil Rhodes was forced to let go of its total control it had on the diamond market, and the governments of countries that had diamond mines began implementing their own mining operations.
Leviev seized the moment.
First, the media noted the increasingly tight friendship between the magnate and the elder daughter of the Angolan president, Isabel dos Santos, who owns a bank in Portugal and several companies operating in the telecom, energy and oil businesses.
Leviev later announced that he had presented the government in Luanda a plan that would help reduce diamond smuggling.
Immediately after, Ascorp (Angola Selling Corp) was created, a joint-venture in which the Angolan state owned half, and the other half was split equally between Leviev and the Belgians of Omega Diamonds. The company monopolized the distribution of diamonds. Starting with the year 2000, Ascorp became the only company that had the right to sell diamonds mined in Angola.
A similar partnership between Leviev and a state-owned company, operates in the diamond mining business. The billionaire is joined at the hip with the National Angolan Diamond Company (Empresa National de Diamantes de Angola, ENDIAMA) through which it entered a joint-venture with the latter"s subsidiary SODIAM, which has the largest share of the diamond production market.
On November 3rd, 2005, in the presence of president Jose Eduardo dos Santos, Leviev launched Angola Polishing Diamonds SA, in which he holds 49% of the shares, while Sodiam, the state owned company holds 48%.
• Epilogue
In Romania, the mogul is not so visibly connected to such influential groups, even though he has sponsored the current governing party.
• Who is Lev Leviev
The man who broke the De Beers monopoly
Lev Avnerovich Leviev (foto) was born in Uzbekistan and when he was just 15 years old, he immigrated to Israel together with his parents. The entire family arrived in the Kiryat Malakhi district, the place for families that "didn"t have a future".
After serving in the army, he became an apprentice in a small diamond factory. The expertise he gained while working there came in very handy, because 45 years later, after breaking the traditional international holding De Beers, Leviev became the owner of the largest diamond polishing company in the world.
Prior to the financial crisis, at the time when he acquired the business in Cotroceni, Leviev had an estimated fortune of 4.5 billion dollars.
The mogul currently leads a cross-border empire that expands from Siberia to Manhattan, has nine children, lives in the most expensive home in Great Britain, strictly follows the laws of the Judaic religion Chabad and makes deals with African governments in countries torn apart by civil wars.
• The Marques report
Journalist Rafael Marques de Morais (foto The Guardian) was put in jail for accusing Angolan president Jose Eduardo dos Santos of destroying the country by serving it on a platter to foreign exploiters. As a journalist and human rights activist, in 2006, Marques received the "Civil Courage" award for his persistence in disclosing the humiliations of his fellow men.
In the same year, he published a report on the natives of South-Western Africa, "Operation Kissonde - The Diamonds of Humiliation and Misery".
July 2004/Betzal"el Street/Ramat Gan/Israel. In the city near Tel Aviv, fortunes are lost and made. Small stones are bought for big money, projects are devised, mining monopolies are being broken. Four sky-scrapers connected by suspended passageways host one of the most important precious stones exchanges in the world.
One of the buildings of Betzal"el Street hosts the headquarters of a new company: Sodiam International Ltd, in which Lev Leviev joined forces with the Angolan National Diamond Distribution Company (Sociedade de Comercializacao de Diamantes de Angola, SODIAM).
The company"s purpose: distribution of diamonds on the international market. Leviev concessioned the richest Angolan mines and is using Sodiam International to sell the gems. His partnership with the state owned company gives him credibility and most of all ensures his monopoly.
Part of the diamonds come from the mine located near the town of Luremo, which was leased for an indefinite period of time to mining companies Luminas.
Held by Leviev together with South-African general Antonio Franca, former head of the Armed Forces of Angola, and with the national mining company, Luminas supplies diamonds worth at least 20 million dollars a year.
Most of the locals work for the Israeli magnate. He is their only source of income.
The Lunda Northe district, where the mine is located, is packed with the "soldiers" of K&P Mineira, the company that guards the mining area. People who dare to try and hide any diamonds found are called "the mine pirates". They are easy prey for the employees of K&P.
The guards armed to the teeth, spread terror, patrol constantly, constantly searching the natives" homes and ransacking them even in the middle of the night.
May 2002/Lunda Northe/Angola. Deloy Mpemba is digging the soil of Luremo to try and find diamonds for Leviev and his partners. The report of Marques lists the man under "victims".
One night, the man was coming back home from the mine, together with his neighbors. All of a sudden, he was surrounded by several guards of K&P.
His memories are hazy: in the beginning a flurry of kicks and fists. He later woke up lying in a pool of blood and mud, unable to move. He didn"t know how long he had been lying there. He had several teeth missing and his knees and hands were broken from the beating he took.
Mpemba is not the only man trampled beneath the bootheels of K&P"s guards.
Antonio Eliseu was 14 years old when he was caught by the guards fishing in a river near one a mine. They immediately accused him of actually looking for diamonds at the bottom of the river. The child cried out to them telling them that he was sick, that he had nothing to eat or any money to go to school.
They then started hitting him.
His friend who tried to defend him, was shot.
Marques"s reports describes horrific images: the guardians of the mines leased by Luminas are accused of humiliating the workers, of forcing them to get undressed and dance naked before them, of beating them savagely, of subjecting them to inhuman treatment and giving them "preemptive" punishments. The guards beat the workers to give them a taste of what would happen to them if they dared to take any gem home.
• Lobby in America
Several dictators are spending significant amounts of money to improve their public image in the USA, spending millions of dollars on American lobby firms, according to data from the US Department of Justice, published by the prestigious publication "Newsweek" and published by our media last week. One such example that is presented in detail is Jose Eduardo dos Santos, the president of Angola, presented as a leader who governs one of the most corrupt political regimes in the world. Over the last few years, the Angolan head of state allegedly paid out three million dollars to American lobby firms.
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