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Monday, May 30, 2005

Romania Prosecutors Detain Dinu Patriciu on Suspicion of Tax Evasion and Money Laundering

Prosecutors have detained Dinu Patriciu, chairman of Romania's second-largest oil company and a top member of the ruling Liberal Party, on suspicion of tax evasion and money-laundering.

Patriciu, who heads the Rompetrol, was detained Friday at the end of 16 hours of questioning by prosecutors.

Prosecutors say they intend to seek a formal arrest warrant on charges of money-laundering, tax evasion and deception.

Patriciu has denied wrongdoing, and claims the investigation was ordered for political reasons by the former government of leftists, with whom he had close ties. He called on prosecutors to question former President Ion Iliescu.

Patriciu's detention "is not legally grounded, and it is bluntly unjustified," said Eugen Babau, communications director of Rompetrol, adding the company would seek to disprove the charges.
The U.S. embassy warned Romania in a statement that if the investigation is proved to be illegitimate, it would damage Romania's business climate.

Prosecutors claim the tax evasion cost the state 300 billion lei (US$10.7 million; euro8.36 million), but Patriciu's lawyers said they have not been shown any facts backing that claim.
"We have not been told what exactly he's accused of doing," said Cristian Iordanescu, one of Patriciu's lawyers.

In a statement, Rompetrol threatened to sue the Romanian government for damages.

Liberal Party vice president Teodor Melescanu called the detention "an abuse," in an interview with Realitatea TV. He said it was "a political attack by those who want to undermine the anti-corruption campaign," launched by the government.

Romania is under pressure from the European Union, which it wants to join in 2007, to crack down on rampant corruption.

Patriciu is a longtime member of the ruling Liberal Party and is close to Prime Minister Calin Popescu Tariceanu.

UPDATE: Standard & Poor's Ratings Services said it placed its 'B-' long-term corporate credit rating on Romania-based oil refining and marketing company The Rompetrol Group N.V. on CreditWatch with negative implications. The CreditWatch status reflects increased concern that this dispute could have an adverse effect on Rompetrol's financial profile, in particular on its liquidity position, which may be inconsistent with current rating in the event of a negative outcome of the situation for Rompetrol.

Posted by Iulia Rasoiu : 5/30/2005 09:47:00 am