The "off-shore" fortune

Over 100 million Euros have left from the accounts of the former Petromservice (currently called PSV Company), controlled by unionist Liviu Luca and businessman Sorin Ovidiu Vîntu, to several companies registered in tax havens.

Some of the money that PSV Company sent to the accounts of several "off-shore" companies - over 30 million Euros - is now at the center of an investigation of the Romanian Tax Administration - which is now trying to determine whether those amounts come from the deal PSV made with OMV-Petrom three years ago.

OMV-Petrom, in which the Romanian state is still an important shareholder, acquired in 2007 several assets from Petromservice, for a price of 328 million Euros. Since the acquisition involved the transfer of assets, part of the price paid by the oil company represented VAT.

A large chunk of the assets of Petromservice were thus returning to Petrom, after having been transferred for free in 2002 to the Association of the Company"s employees led by Liviu Luca.

In order to get them back, OMV-Petrom paid a huge amount to the Luca-Vîntu group: 328 million Euros.

Out of this amount, Petromservice only earned 296 million Euros, because 32 million Euros are still stuck in an escrow account with ABN Amro.

The 32 million Euros were initially frozen for a year and a half in order to guarantee Petrom against any hidden flaws in the assets it had acquired. Later, the money remained frozen for a different reason: the VAT for the transaction was never paid to the state.

In reality, Petromservice did pay the VAT to the state, but the Ministry of Finance later returned that money to the company, in dubious circumstances, during the tenure of Finance minister Varujan Vosganian.

The potential loss for the state budget: 62 million Euros.

After the transaction with OMV-Petrom, Petromservice changed its name to PSV Company, and part of the company"s money was transferred "off-shore", while some of it went into the accounts of domestic companies, including Realitatea Media, the company which manages Realitatea TV.

The amounts transferred to the "off-shore" accounts exceed 100 million dollars. This entire financial circuit is being investigated by the Tax Administration and by prosecutors, and those investigations lead to another series of criminal prosecutions, which led to the arrests of the former managers of PSV, including chairman Mihai Sorin, under the charge of tax evasion.

The prosecutors also suspect that the money from the deals between Petrom and Petromservice were used, again through an "off-shore" connection, to transfer money to the accounts of the fugitive Nicolae Popa, who fled to Indonesia. This financial circuit is precisely what allowed the recent arrest of Sorin Ovidiu Vîntu, charged with aiding and abetting Nicolae Popa, who was convicted in the FNI fraud.

• The bet on the only deposit of its kind in Europe

PSV Company currently has a three-year reorganization plan, which is based on the exploitation of the brucite mine of Budureasa, which could bring it at least 100 million Euros.

PSV Company controls this valuable mine via Geoasset SRL, a company in which it holds 100% and which holds the exploitation license for the deposit of Budureasa. The license was awarded by the National Agency for Mineral Resources and it was approved by the Government via Government Ordinance HG 1412/14 of November 2008, for a 20-year period, with the option to extend the license in 5 year increments.

• The secret Budureasa affair

Lying in the mountains of Bihorul, the Budureasa commune gave the name of one of the most well kept secret files of the former Romanian Security Agency (the so-called Securitate). It all began when a huge deposit of limestone, magnesium and uranium. On direct order of Nicolae Ceauşescu 150 billion lei were spent on drilling, research and 15 kilometers of tunnels. Everything was done in the deepest secrecy. The exploitation never began, and after 1990, the mine was closed down without being homologated.

In 2003, a certain Mrs. Ana Bodea received an exploitation license for the Budureasa mine. Four years later, Petromservice acquired the shares of the small company which held the license, which had its office in an apartment. Concurrently, Liviu Luca, the associate of Sorin Ovidiu Vântu, bought another company of Mrs. Bodea, which held licenses for the exploitation of oil deposits. Some experts estimate that the mine of Budureasa is worth more than 10 billion Euros.

PSV now holds a license to exploit the mine of Budureasa until 2018, after the Tăriceanu government gave the final approval and extended its license by twenty years.

The Tăriceanu government approved the license for the company controlled by PSV, in 2008, just three weeks before the elections.

Today, according to PSV"s reorganization plan, the extraordinary worth of the mine of Budureasa stems from the fact that it is the only one of its kind in Romania as well as in Europe. The estimates are confirmed by the market and technological research studies performed so far by Roskill (UK), Cimprogetti (Italy), Imerys (UK), Eutec (Spain), Tru Grup (Canada) and Minesa (Romania). There are no companies in Romania that exploit brucite, and competition in the EU is rather weak, since there are no other brucite deposits that can match the quantity and quality of the one found in the Budureasa mine.

For the first 20 years of exploitation, it is estimated that over 91 millions tones will be extracted, of which the usable ore will amount to 19.8 million tons (dolomite limestone and brucite - several types) and 80.145 million tons of stone used for construction materials.

PSV had big plans for the exploiting the mine, which included investing nearly 178 million Euros for over 20 years. The company planned to build a mineral binder plant (27,670,000 Euros), a granular products plant (40,487,000 Euros), a metallurgical magnesium plant (91,300,000 Euros) and a factory of construction rocks (18,500,000 Euros). The company expects a gross profit of 1.3 billion Euros over the course of 20 years, with the metallurgic magnesium expected to account for half of that figure.

In its reorganization plan, PSV states that General Trade Consult only valued the stakes it holds in Geoasset at the face value of 1,877,780 lei in the event of the company going bankrupt.

In turn, PSV claims that if the reorganization were successful, given the potential of the investments in the project of Budureasa, would increase the stake of PSV in the mining project to 100 million Euros, provided the investment schedule was followed through.

PSV is currently negotiating the sale of the materials it has mined so far.