August 20, 2018 / 9:30 PM / a month ago

UPDATE 1-Mexican steelmaker paid millions to Odebrecht shell company -report

(Adds comment from Odebrecht)

By Christine Murray

MEXICO CITY, Aug 20 (Reuters) - Altos Hornos de Mexico, one of Mexico's largest steelmakers, paid $3.7 million to a shell company allegedly set up by Brazilian builder Odebrecht to pay bribes, investigative news site Quinto Elemento Lab reported on Monday.

Citing documents from Brazil's Supreme Court, Quinto Elemento reported that AHMSA made three wire transfers to Grangemouth Trading Co's account weeks after the steel company announced a controversial 2014 sale of a fertilizer plant to Mexican state oil company Pemex.

It is unclear what links may have existed among Odebrecht, AHMSA and Pemex. Reuters reviewed the documents obtained by Quinto Elemento.

Mexican prosecutors have said they are probing business between the oil company and the Brazilian conglomerate, which in recent years has admitted to paying over $3 billion in bribes across Latin America, including $10 million in Mexico.

AHMSA spokesman Francisco Orduna confirmed to Reuters that the payments were made but said they were for Grangemouth to advise AHMSA on equipment, systems, logistics and suppliers for a steelworks expansion in Monclova, Mexico.

Odebrecht said in a statement on Monday it is cooperating with authorities in all the countries in which it operates.

The Brazilian construction company has been at the center of one of the world's largest corruption scandals for paying billions of dollars in bribes across the region in exchange for public works contracts. In Brazil, the far-reaching kickback investigation focusing on Odebrecht has led to prison terms for more than 130 politicians and corporate executives.

The account paid into by AHMSA, according to the documents cited by the report and seen by Reuters, was registered in Antigua by people working for Odebrecht in the name of Grangemouth, which is registered in Scotland.

Quinto Elemento reported that Grangemouth appears on a list of offshore companies set up by Olivio Rodrigues Junior, who worked for Odebrecht and who in testimony to Brazilian prosecutors said he helped his employer pay bribes, according to the documents.

Grangemouth, registered in Britain in March 2013, says in documents from the business registry that it sources heavy equipment and represents manufacturers and used equipment dealers. It lists as its general partner Stichting Tilbourg Crossing, a Netherlands-based entity that the documents say was also part of the Odebrecht bribes structure.

Reuters was unable to reach anyone representing Grangemouth or Stichting Tilbourg Crossing.

According to Quinto Elemento's report, the payments began shortly after AHMSA completed the $273 million sale of a fertilizer plant to Pemex, a transaction later criticized by Mexican auditors as expensive and poorly analyzed.

Quinto Elemento did not find a direct link between the Grangemouth payments and the Pemex contract or determine where the money AHMSA paid to Grangemouth went.

Pemex's chief executive at the time, Emilio Lozoya, has been questioned by Mexican prosecutors about Odebrecht bribes.

Last year, Quinto Elemento published videos of testimony by Odebrecht executives to Brazilian prosecutors in which they said they paid Lozoya millions of dollars in bribes in exchange for contracts. Reuters could not independently verify the videos.

Lozoya's attorney, Javier Coello Trejo, told Reuters last week that his client did not receive bribes from Odebrecht or AHMSA and that none of his Lozoya's work at Pemex has been proven to have involved corruption.

AHMSA's Grangemouth payments were made to an account with Meinl Bank Antigua, Quinto Elemento reported. The account is the same one Odebrecht executives said in testimony that they used to pay Lozoya.

Once a close adviser of outgoing President Enrique Pena Nieto, Lozoya ran Pemex from 2012 until 2016, when he stepped down to make way for a new chief executive tasked with cutting costs in a global oil market rout.

Pemex declined last week to comment on issues related to Odebrecht, citing the ongoing investigation. It said the fertilizer plant it bought from AHMSA, which had not operated for 18 years before the purchase, has been renovated and is now running.

Mexico's congressional auditor, ASF, has criticized various transactions Lozoya oversaw at Pemex in its published reports, including contracts with Odebrecht and the fertilizer plant purchase.

In one ASF report, the agency analyzed trips by Lozoya and Pemex aides in a helicopter he purchased as chief executive. They found the helicopter took 54 trips in 2015 to the Mexico City offices of Grupo Acerero del Norte (GAN), the holding company that owns AHMSA.

AHMSA spokesman Orduna told Reuters that Lozoya used the company's heliport, but did not necessarily visit the steelmaker itself.

Lozoya's lawyer told Reuters last week that not all the trips were taken by his client. Other Pemex officials used the helicopter, he added, explaining that GAN's heliport is close to Pemex offices and was sometimes used for logistical reasons. (Reporting by Christine Murray; Additional reporting by Ana Isabel Martinez and Lizbeth Diaz; editing by Clive McKeef and Jonathan Oatis)

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