• Ex-Gunvor executive pleads guilty in New York

• Sought to corrupt Ecuador oil company officials

• Commission eyes probe as local loophole closes

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Lyford Cay-based commodities trader has become embroiled in a $22m bribery scheme after one of its former senior executives pled guilty to corrupting government officials in Ecuador.

Raymond Kohut, who worked for Gunvor (Bahamas) for a decade between 2009 and 2019, admitted to his role in the affair when he appeared before the eastern New York federal court last week to answer charges brought by the US authorities.

Legal documents filed by the US government, which have been obtained by Tribune Business, allege that two other senior Bahamas-based staff - named as “trading company employee one” and “trading company employee two” - also played key roles in a years’-long bribery and money laundering scheme designed to win and maintain lucrative Gunvor contracts with Ecuador’s state-owned oil company.

Christina Rolle, the Securities Commission’s executive director, yesterday revealed that the Gunvor episode exposed a former legal loophole that meant the commodities broker/trader’s activities in The Bahamas had previously gone unregulated and unsupervised.

She revealed that last year’s reforms to the Financial and Corporate Services Providers Act were designed partially to bring such companies under this law’s remit. Gunvor and other Bahamas-based commodities traders have until June 14 to come into compliance with the Act, and Ms Rolle indicated the Securities Commission may now probe the Ecuador affair.

Unaware of the New York court proceedings until informed by Tribune Business, she said: “We can still look into it especially as it may affect current governance. It’s something we would take an interest in as it may affect the governance.

“They should come under the new Financial and Corporate Services Providers Act, which calls for the regulation of commodities trading. Prior to that, commodities trading was not regulated in The Bahamas. This is something we had identified. We didn’t really have any legislation for commodities trading. 

“We’ve included it now in the Financial and Corporate Services Providers Act. As of December 14, they’re now required to be regulated. There is a six-month transition to bring them into line with the regulations from December 14.”

The court documents obtained by this newspaper allege that Kohut, together with the two other Gunvor (Bahamas) executives and a pair of unnamed “consultants”, participated in “international bribery and money laundering schemes” from 2012 to August 2020.

“In furtherance of those schemes, Kohut, together with others, knowingly, willfully and corruptly agreed to offer and pay bribes on behalf of [Gunvor] to, and for the benefit of, Ecuadorian officials in order to obtain and retain business for [Gunvor],” the US federal authorities alleged.

“During the same time period, Kohut, together with others, also agreed to knowingly conduct financial transactions designed to conceal and disguise the illegal bribery scheme and with the intent to promote the illegal bribery scheme.”

The targets were senior officials at Petroecuador, the South American nation’s state-owned oil company, and other government-controlled entities that loaned the former money secure against future oil deliveries.

Gunvor did business with the Ecuador state-owned agencies that received the oil delivered by Petroecuador, marketing and selling these shipments on their behalf. The bribes were paid to “secure improper advantages” for Gunvor in winning and maintaining these contracts.

The US federal authorities alleged that “trading company employee two”, described as a Spanish citizen and manager of Gunvor’s Bahamian subsidiary, helped draft “several corrupt agreements” with the two unnamed consultants. The latter duo e-mailed invoices to Gunvor (Bahamas) and other affiliates, which were subsequently approved, to help conceal the bribery scheme.

Kohut, “trading company employee two” and ““trading company employee one”, another Spanish citizen who was described as a “senior manager” of Gunvor (Bahamas) between 2014 and 2017,  are alleged to have paid the two consultants more than $70m to facilitate the bribery scheme. 

“Kohut, ‘trading company employee one’ and ‘trading company employee two’ knew and intended that these payments would be used, at least in part, to pay bribes to Ecuadorian officials. In total, in furtherance of the scheme, consultant one and consultant two made bribe payments to Ecuadorian officials on behalf of [Gunvor] totalling at least $22m,” the US authorities alleged.

“From the inception of the bribery scheme in approximately 2012, ‘trading company employee one’  often instructed Kohut to communicate about issues related to the bribery and money laundering schemes using their personal e-mail accounts.

“In addition, in their e-mail communications regarding the schemes, Kohut, consultant one and ‘trading company employee one’ often referred to co-conspirators by code names rather than their actual names.”

Gunvor, in an e-mailed response to Tribune Business, said it had terminated its relationship with the two consultants involved in the Ecuador sage prior to learning of the US investigation. 

“Gunvor Group has learned of charges being brought against a former employee of the company by the US Department of Justice (DoJ) that relate to business with an intermediary agent and Petroecuador,” it added. 

“Gunvor terminated its relationship with the intermediary agent for compliance reasons before being notified of any investigation. Gunvor takes compliance very seriously and maintains a zero tolerance approach, which is why the company has since also banned outright the use of agents for business development purposes. Gunvor has been fully co-operating with the Department of Justice investigation and will continue to do so.”

Gunvor (Bahamas), which is based on the fourth floor of Lyford Cay House on Western Road, is a subsidiary of Gunvor Group, which was founded as an independent oil and energy trader/broker in 2000.

Describing itself as “one of the world’s largest independent commodities trading houses by turnover”, with headquarters in Geneva, Switzerland, Gunvor’s website shows it as employing 1,500 employees worldwide and having annual pre-COVID revenues of $75bn. With a presence in more than 100 countries, it says it trades more than 2.7m barrels of crude oil and related products daily.