(Nov 19): Trafigura was accused by Swiss prosecutors of channelling bribes to an Angolan official through a network of former employees, including one nicknamed “Mr Non-Compliant” by the company’s late founder.

The trading house heads to court Dec 2 facing charges that its former parent company Trafigura Beheer BV failed to prevent unlawful payments over the 2009 to 2011 period, alongside former senior executive Mike Wainwright, a Swiss middleman who can only be named as P, and a senior Angolan public official Paulo Gouveia Junior. 

A 150-page indictment released on Monday detailed how the bribes were allegedly paid and for the first time claimed that Trafigura’s late founder and chief executive officer Claude Dauphin was a central participant in the scheme.

The indictment lays bare how Trafigura’s most senior executives — up to and including Dauphin — were allegedly involved in corruption. While there have been numerous corruption cases in the past four years against commodity trading companies, only a few individual mid-level traders have been convicted. 

If convicted, Trafigura faces a maximum fine of just five million Swiss francs (RM25.23 million), roughly what the company made every six hours last year from trading oil, metals and other commodities, plus repayment of the illicit profit of over US$140 million. 

Switzerland’s Federal Criminal Court has scheduled three weeks for the trial and listed two reserve dates in late January if necessary. Trafigura said it rejects the charges.

The trial comes after a year in which the company admitted paying bribes in Brazil, settled a US case over alleged manipulation of fuel oil markets, and most recently announced it’s facing a US$1.1 billion (RM4.92 billion) loss after being the victim of a fraud by its own employees in the tiny oil market of Mongolia.

A guilty verdict would be the first time in Swiss history a company has been convicted at trial for allowing the payment of bribes. Switzerland is already under pressure to prove it can be tough on a commodities industry that’s long operated under a light regulatory touch.

It’s the latest in a series of cases around the world that have cast the commodity trading industry in an unfavorable light, with Trafigura as well as rivals Vitol Group, Glencore plc and Gunvor Group all admitting to multi-year bribery schemes. 

The indictment describes an opaque system of payments.

On March 26, 2009, a letter on Trafigura-headed paper arrived at Credit Agricole SA’s Geneva branch, recommending a banking relationship be set up in favour of Gouveia, CEO of the fuel retail arm of Angola’s state energy company. Less than two weeks later, Gouveia arrived in the Swiss city for a short, but busy visit.

Trafigura put him up at the Four Seasons’ Hotel des Bergues, overlooking Geneva’s famous lake. Gouveia was also invited to dine at the home of Dauphin, the trading house’s legendary founder.

But the stay was also to cement other relationships, Swiss prosecutors allege. Gouveia opened a Credit Agricole account under the name of a company called Wyland Group Ltd, through which he would receive funds totalling the equivalent of US$5.79 million between July 10, 2009 and Oct 20, 2011.

The funds would come initially from Enelmer International Ltd, set up in the preceding months by Trafigura’s Mariano Ferraz. Later payments were made by Consultco Trading Ltd – a British Virgin Islands-registered company with an address in Dubai – run by a former Trafigura executive known as P. Swiss prosecutors say there were 16 transfers from Consultco’s Emirates NBD Bank account to Wyland’s Credit Agricole account.

Another former Trafigura employee was installed as a “controller” of the money flowing through Consultco, according to the indictment. He had worked at Trafigura from 1997 to 2007, before setting up a consulting business in Geneva whose only clients were the trading house and its agents and intermediaries. Dauphin nicknamed him “Mr Non-Compliant.” That’s because he “did the things that could not be done internally within the Trafigura Group,” according to the indictment.

Gouveia, for his part, would sign multi-year chartering contracts for eight vessels and a shipping fuel supply deal that would net Trafigura a total of US$143.7 million in profits, according to the prosecutors.

Gouveia’s stay in Geneva was not the only time that Trafigura paid for the travel of its Angolan business contacts, according to the indictment. One of the trading house’s subsidiaries paid for the daughter of an Angolan official to attend a summer camp in Gstaad, Switzerland. Another subsidiary paid a US$70,050 bill for a five-day hotel stay in Rio de Janeiro during Carnival in 2011.

Trafigura has argued in the past that the Swiss case against it hinges largely on testimony that should be disregarded, because it comes from Ferraz, a former executive at the company who was found guilty on corruption charges in Brazil in 2018 and testified to prosecutors as part of a plea agreement.

The Swiss charges against Trafigura Beheer allege the company failed to take the necessary measures to prevent bribes being paid, Trafigura Group said on Monday. Trafigura said that its anti-bribery and corruption controls were “externally reviewed and assessed to have met legal requirements and international good practice standards applicable at that time.”

Since then, Trafigura said it’s invested significant resources in staff training, strengthened compliance teams and controls, and from 2019, prohibited the use of third parties for business origination. 

Jean-Louis Scenini, a lawyer for Gouveia who was CEO of Sonangol Distribuidora, wasn’t immediately available for comment. Daniel Tunik, a lawyer for the middleman P, declined to comment.

CA Indosuez (Switzerland), which was then Credit Agricole Switzerland, declined to comment. Emirates NBD didn’t respond to a request for comment outside of normal business hours.

Wainwright, who was chief operating officer and a Trafigura board member, “entirely rejects the allegations made against him,” said his lawyer Daniel Kinzer. “He has full confidence the court will find the allegations to be unfounded and will dismiss the case made against him.”

If he’s found guilty, Wainwright would be one of the most senior commodity traders ever to be convicted of corruption.

A protégé of founder Dauphin, Wainwright was one of Trafigura’s first employees, joining the company in 1996. He was COO from 2008 until last year, when he announced his retirement. For many years, the quietly spoken English accountant was one of the company’s most powerful figures: he personally approved its outgoings and had meticulous knowledge of its sprawling business dealings around the world.

In 2009-2011, according to the indictment, he was responsible for monitoring market and strategic risks, human resources, compliance and was the main point of contact for Trafigura’s auditors.

The Swiss prosecutors’ case focuses on his role approving payments which, they say, were used to bribe Gouveia. It was Wainwright whose signature was on the letter recommending Credit Agricole set up an account for Gouveia, according to prosecutors.

Three payments made from Trafigura through Enelmer to Gouveia’s company were initialed “MW” in Trafigura’s internal documents, the indictment says. 

And Wainwright was a key point of contact between Trafigura and “Mr Non-Compliant,” who worked for the company from 1997 until 2007, the indictment alleges. 

It was Wainwright who ordered “Mr Non-Compliant” to make the first two payments totalling US$1 million from P’s firm Consultco to Gouveia’s company in August 2009, according to the indictment, which cites an online messaging chat between Wainwright and “Mr Non-Compliant.”

Wainwright also agreed to give the former Trafigura employee access to the company’s internal trading system, called Pluto, and was regularly in touch with him via SMS, email and online messenger, according to the indictment.

Dauphin, who died in 2015, “must have been involved” in the decision to bribe Gouveia, according to the indictment.

A lawyer for Dauphin’s heirs had no immediate comment. 

It’s the second time this year that claims of wrongdoing have been leveled at Dauphin, a totemic figure within the company and the wider trading industry. Earlier this year, when Trafigura pleaded guilty to US corruption charges in March, it admitted as “true and correct” a statement of facts that included the claim that Dauphin approved bribe payments for oil deals in Brazil. 

Dauphin’s family responded angrily, with his son telling Bloomberg that Trafigura was using him as a “scapegoat”.

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