Solway “Criminal” Past Exposed -Reports Cite Money Laundering, Harassment, Threats

The year was 2019, and executives at Swedbank were worried. News had broken that their Estonia business had been used to launder billions of dollars, and they were scrambling to contain the fallout. On February 25, Swedbank put out a memo to staff outlining measures taken to deal with the “high risk” clients in previous years. Among the high-risk clients that Swedbank had red-flagged was Solway Investment Group, a steel company that operates mines and smelting facilities around the world and is now being accused by global steel giant ArcelorMittal of encroaching on its concession areas in Liberia’s Nimba County.

According to highly placed sources within the internationally acclaimed Organized Crime and Corruption Reporting Project (OCCRP), and from documents obtained from the OCCRP web portal, most of the companies in the Solway group were identified as “holding/transaction entities,” some of which had carried out “questionable transactions”. OCCRP noted Solway had “declined the request to present correct ownership documentation” and so was “off-boarded in 2011.”

“Swedbank dropped Solway at a time when huge sums of suspect money were flowing through its Baltic operations. Investigators would later find that at least 200 billion euros were laundered through accounts in the Estonian branches of Swedbank and Denmark’s Danske Bank between 2007 and 2015. Much of this flowed from Russia and Eastern Europe to shell companies, in one of the world’s largest-ever money laundering scandals.

“Now, a data from these banks leaked to Swedish broadcaster SVT — analyzed as part of the Mining Secrets project led by Forbidden Stories — has identified hundreds of questionable payments that might have led Swedbank to drop Solway as a customer,” OCCRP disclosed on its web portal.

During a grinding OCCRP investigation, it was discovered that 23 companies related to the mining group that moved close to $1.9 billion between 2007 and 2015 in large, round-dollar payments without a clear business purpose — hallmarks of what is known as “suspicious activity”, were all linked to the Solway group or its senior executives.

“It’s unclear where any of the $1.9 billion originated, or why Solway would need to move money around like this. But buried in banking records from previous OCCRP investigations, reporters found that companies from the group of 23 had transacted with other companies used in Russian tax evasion and money laundering scandals.

“A former Swedbank official, who spoke on condition of anonymity, said the country of Estonia positioned itself as a “kind of transit republic” for Russian money at that time.

“Today, having connections to the Kremlin is a negative,” the former official said. “At that time, it was more of a reassurance that your client would probably have a slightly longer career than other clients,” a detailed May 2022 OCCRP report stated.

However, according to OCCRP, Solway denied it had been involved in any illicit transactions, saying it acts “strictly in line with applicable national laws and international regulations” and works to combat corruption. A spokesperson declined to comment on Swedbank’s decision, except to say Solway had “followed all the necessary procedures to comply” with the bank’s new policies.

“Solway Investment Group firmly rejects the allegations of money laundering and corruption. No accusations of wrongdoing were ever brought against us by any financial or regulatory bodies,” the company said.

After OCCRP and 20 partners published an array of stories in May 2022 as part of the Mining Secrets project, Solway released a statement rejecting reporters’ findings and adding that the company has exited all of its investments in Russia.

Swedbank declined to comment on individual customers, but noted that it had already been fined by authorities for “past shortcomings in the management and control of measures against money laundering in the bank’s Baltic operations.”

Solway Accused of Polluting Guatemala’s Largest Lake

In a related development, locals in Guatemala have accused Solway of harassment and intimidation of locals over protests for Solway polluting Izabal, the country’s largest lake.

In a March 7, 2022 OCCRP report syndicated with The Guardian (UK), Le Monde (France), Radio France (France) and Prensa Comunitaria (Guatemala), leaked documents showed that executives from subsidiaries of Swiss mining company Solway knew contaminated water was leaching from the Fénix nickel mine.

According to the reports, Solway publicly claimed that a mysterious red slick on Lake Izabal was algae in 2017. However, in private, leaked documents reveal, executives knew that red water was pouring from its mine.

“Independent experts who reviewed Solway’s own water and sediment data said it showed that Lake Izabal is contaminated with heavy metals. Monitors from state agencies filed report after report warning about the red water leaching from the site — but publicly the government backed Solway,” the report revealed, noting that Solway’s Guatemalan subsidiaries had plowed funds into local communities to sway opinion in their favor.

“Journalists who reported on problems at the Fénix mine were harassed, surveilled, and their homes were raided.

“Olga Marina Ché Ponce wasn’t home the day the police came. When officers stormed into her house in El Estor, in the east of Guatemala, they found only her 18-year-old son and toddler daughter at home. They ransacked the place, eating her food and killing several of her animals.

 “Police raided dozens of houses in El Estor belonging to people who had been protesting against the nearby Fénix mine in late October. For three weeks, residents had tried to block trucks from entering and leaving the site, but they were met with tear gas, beatings, and arrests. As clashes escalated, authorities declared a month of martial law, including a dusk-to-dawn curfew.

“Authorities act like “we are terrorists, when it is not true. We are asking for our rights,” Ché told OCCRP partner The Guardian in January. “We do this so that the community has a clean environment, better water, a better place to live without pollution.”

Nimba’s Broken Promises

On the home front in Liberia, communities within Solway’s mining concession areas in Nimba County have threatened to withdraw from a 2020 Memorandum of Understanding that allowed the company to operate in close proximity to the country’s largest natural forest and wildlife reserve.

Although Solway had denied any wrongdoing, the locals have accused Solway of reneging on promises made in the MOU, a document whose legality Mines authorities have allegedly questioned.

“Solway is a big disappointment. We don’t see the schools and health centers they promised us,” affected communities’ leaders informed the media at the time.

ArcelorMittal’s Beef

For some time now, the global steel giant ArcelorMittal (AM) has been urging the Liberian government to cancel all agreements with third parties in its concession area, including Solway, and that government should take no further steps that violate its mining rights in Liberia.

According to ArcelorMittal, it has taken serious exception to SOLWAY’s mining license, arguing that under its Mineral Development Agreement (MDA), it enjoys exclusive right and license to conduct exploration, development, production, and marketing of Iron Ore and associated products, as well as rehabilitation of the associated infrastructure in its areas.

The company warned that Solway’s license to explore iron ore falls within its concession area and it is clear that the issuance of the Solway License violates Arcelor Mittal’s exclusive rights under the MDA.

AML, which has invested more than US$1.6 billion in Liberia and created over 3,000 jobs for Liberian citizens, has also accused the government of granting two additional graphite-mining licenses to Mekinel Holdings Limited and SRG Liberia, without consultation as required by the MDA.

Editor’s note: The OCCRP is a consortium of investigative centers, media and journalists operating in Eastern Europe, the Caucasus, Central Asia and Central America. It was founded in 2006 and specializes in organized crime and corruption. It publishes its stories through local media and in English and Russian through its website. In 2017, NGO Advisor ranked it 69th in the world in their annual list of the 500 best non-governmental organizations.

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