Polish public prosecutor launches investigation into Orlen’s Swiss trading company

The Polish public prosecutor’s office has launched an investigation into the Swiss subsidiary of Poland’s energy giant Orlen, which has lost more than 1.5 billion zloty on prepayments for oil made without collateral.

The prosecutor’s office also announced that it had conducted searches of the homes of Orlen board members, including former long-time CEO Daniel Obajtek, in two different ongoing cases.

These involve the sale of the company’s assets to the Saudis and suspicions that, in the run-up to last October’s elections, Orlen artificially kept fuel prices low in order to support the then-ruling Law and Justice Party (PiS).

Prokurator krajowy Dariusz Korneluk: Prowadzone są trzy śledztwa w sprawie Orlenu. pic.twitter.com/5oFlFTsowF

— tvp.info 🇵🇱 (@tvp_info) April 30, 2024

“Matters concerning Orlen are very important from the point of view of national security, including energy security. For this reason, we approach these matters with the utmost determination and priority,” said Dariusz Korneluk, the national public prosecutor, at a press conference yesterday.

“At the moment, as far as Orlen is concerned, there are three main, major proceedings”.

The first of the cases relates to Orlen’s merger with Lotos and the approval in August 2022 of the sale of a 30% stake in the Gdańsk Refinery, owned by another state company, Lotos, to Saudi Aramco, the world’s biggest oil producer.

In a report published in February, Poland’s Supreme Audit Office (NIK) revealed that Orlen sold assets to Saudi Aramco at billions below their value. “In this case, the damage today is of great magnitude, amounting to 4 billion zloty,” said Korneluk.

Poland’s audit office has found that state energy giant Orlen sold assets to Saudi Aramco at billions below their value.

It also says that the sale, which gave the Saudis partial control of a Polish oil refinery, “resulted in significant security risks” https://t.co/5DUnyxKQcs

— Notes from Poland 🇵🇱 (@notesfrompoland) February 5, 2024

The second investigation relates to suspicions that Orlen, which controls around 60% of Poland’s fuel market, artificially depressed fuel prices at its stations before the parliamentary elections in October.

Some experts and the then-opposition accused Orlen of doing so to support PiS’s re-election bid. Orlen strongly denied such claims.

In this case, the damage, calculated on the basis of information provided by one of Orlen’s shareholders, was estimated at 1 billion zloty.

“We are investigating [in these two cases] who made the decisions, but also what was the oversight from the minister of state assets, the prime minister,” said Korneluk.

State energy giant Orlen’s wholesale fuel prices have continued their post-election rise.

The firm was accused of artificially lowering prices before the elections to help the ruling party. It denied those claims.

For more, see our report from last week: https://t.co/GIKRT8gsW5 pic.twitter.com/2xYI7MUZjP

— Notes from Poland 🇵🇱 (@notesfrompoland) October 24, 2023

“The third, another very shocking case revealed recently, is the unsupervised transfer of more than 1.5 billion zloty to OTS,” Korneluk said, referring to Orlen Trading Switzerland, Orlen’s Swiss subsidiary that was established in 2022 to trade crude oil and petroleum products.

Last week, Orlen’s new management board, which took over the company after its predecessors were dismissed by the new government, announced that the company lost roughly $400 million (1.6 billion zloty) on prepayments made without collateral for Venezuelan crude oil and petroleum products that were never delivered.

Also last week, the public prosecutor’s office opened an investigation into the case, it was reported at yesterday’s conference.

Polish state energy giant Orlen has revealed details of $400m it lost on prepayments made without collateral for Venezuelan oil that was never delivered.

It has notified prosecutors regarding the actions of the former management in relation to the case https://t.co/D16u4LnAj8

— Notes from Poland 🇵🇱 (@notesfrompoland) April 23, 2024

“‘First of all, there is a huge amount of money that was spent without any control from the Orlen management, an amount of more than 1.5 billion zlotych…without any control on the part of the OTS entity that spent these funds,” said Warsaw regional prosecutor Małgorzata Adamajtys, speaking alongside Korneluk.

She stated that OTS’s CEO at the time, who can be only named as Samer A. under Polish privacy law, should never have been put in charge of the company.

The businessman may have been linked to the terrorist and Iranian-funded organisation Hezbollah, the news service Onet reported earlier, citing sources. Prosecutors declined to confirm this information.

“This case is being taken very seriously in the prosecution service,” said Adamajtys. “On Monday, we will receive a number of documents from Orlen. We will review them further. But this case will take some time.”

Samer A. told RMF FM radio that he has not yet received any charges from the prosecution and that what the press is publishing about him “is politically motivated”.

– Nigdy nie otrzymałem żadnych zarzutów wobec mnie z prokuratury – powiedział w rozmowie z RMF FM Samer A., prezes OTS. Onet podał wcześniej, że biznesmen mógł być powiązany z terrorystyczną i finansowaną przez Iran organizacją Hezbollahhttps://t.co/zdAY7TAnBJ

— Gazeta.pl (@gazetapl_news) April 30, 2024

Korneluk also reported that in connection with the first two ongoing investigations, searches had been carried out at, among others, homes and estates of former Orlen CEO Daniel Obajtek and “six or seven” directors of the company.

Korneluk announced that an interrogation of Obajtek is also planned, although it is not yet clear whether this will take place as a witness or a suspect.

Obajtek denied any wrongdoing, adding that “politicians of the ruling coalition, journalists and now even the prosecution are trying to carry out a public lynching” on him.

“I do not and never have had anything to hide and the prosecution has the necessary data. All of Orlen’s transactions were and are recorded and documented,” he wrote on X (formerly Twitter) yesterday.

A ruling coalition MP, Michał Szczerba of the Civic Coalition (KO), told TVP this morning that according to his information, Obajtek is currently outside Poland. “I have passed this information to the prime minister [Donald Tusk],” he said.

Politycy rządzącej koalicji, dziennikarze, a teraz nawet prokuratura próbują dokonywać na mnie publicznego linczu i samosądu. A jeszcze niedawno nawoływały do przywrócenia „praworządności i zasad konstytucyjnych”. Przypominam więc, że wedle tych zasad o winie decyduje sąd, a nie…

— Daniel Obajtek (@DanielObajtek) April 30, 2024

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Main image credit: Kancelaria Premiera / flickr.com (under CC BY-NC-ND 2.0 DEED)