iNVEZZ.com, Tuesday, July 9th: A Paris court yesterday dismissed corruption charges against Total SA’s (EPA:FP, NYSE:TOT) chief executive Christophe de Margerie related to the United Nations’ oil-for-food programme in Iraq.
The Paris Criminal Court also dropped charges against Swiss oil trader Vitol SA. Total’s share price closed more than one percent higher on the NYSE on Monday and was also up in early trading in Paris on Tuesday.
Total Sees Charges Dropped
In a short statement on Monday, the French energy giant said that the Paris Criminal Court handed down its decision in the oil-for-food trial, dismissing the charges against Total, the company’s chief executive Christophe de Margerie and five former employees.
De Margerie had been accused of misusing company assets whereas claims against Total included influence peddling as well as allegations that the company had knowingly purchased oil from Saddam Hussein’s regime on which “surcharges” had been paid to finance commissions for Iraqi officials.
Switzerland’s Vitol was found not guilty of corrupting foreign public agents and former French interior minister Charles Pasqua was cleared of passive peddling of influence and corrupting foreign public agents.
Reuters quoted Total’s lawyer Jean Veil as saying that the company was satisfied. “For eight years our clients have been anxiously awaiting this decision,” Veil said. “Not influence peddling, not corruption, not misusing company assets – what we’ve been saying since the beginning.” Prosecutors have ten days to appeal against the verdict. Total could have been fined €1.88 million (£1.62 million) whereas de Margerie had faced up to five years in prison and a fine of €375,000.
The $60 billion (£40.1 billion) oil-for-food programme was introduced in 1996 by the UN with the purpose of easing conditions in Iraq following the sanctions imposed on the country for its 1990 invasion of Kuwait. The UN programme allowed Iraq to sell oil to pay for food supplies and ran until the US-led invasion in 2003.
In 2005, a report by Paul Volcker, a former chairman of the US Federal Reserve, alleged that more than 2,000 companies from 66 countries were involved in illicit payments of some $1.8 billion to Saddam’s administration, which overcharged for the oil and pocketed the surplus. The Volcker report indicated that about 60 percent of the companies in the oil-for-food programme had paid surcharges on humanitarian goods.
The French investigation started in 2002 with Total being accused of paying surcharges through intermediaries in the form of mark-ups over the market price for oil. Total denied making such payments and was not faulted in the Volcker report.
In May, the French energy giant agreed to pay $398 million to settle US criminal and civil allegations that it had paid bribes to win petroleum contracts in Iran in the 1990s, with French prosecutors saying that they would seek charges against Total and de Margerie for possible violations of French laws.
Total’s share price was 0.67 percent up at €38.29 in Paris as of 09:37 CEST on 9 July 2013. In New York, Total’s share price closed 1.26 percent higher at $48.96 on July 8.