Norwegian Company Cleared of Mafia Connections
(First published in Norwegian 30 March 2007)
By Erik Hagen
“It has not been possible to document any connections between Halaco and organized crime. We did not find what we were looking for. Halaco has consequently for all practical purposes been cleared of suspicion,” José Rolando Monroy, El Salvador’s public prosecutor for economic criminal investigation, told Norwatch.
As previously reported by Norwatch, the Norwegian company Halaco bought 90% of the shares in the Salvadoran garbage management company Mides in 2004 for $11 million. At that time Mides and its previous owners were under investigation for whitewashing of Canadian drug money.
The Norwegian acquisition aroused the suspicion of the Salvadoran authorities, and the investigators tried to ascertain whether Halaco also was a part of organized crime. The department for economic investigation received assistance from the Oslo police in the investigation. They were especially looking for ownership connections between the previous owners in the 1990s and the new, Norwegian owners.
But the authorities did not find what they were looking for, and Halaco has now for all practical purposes been cleared from the case. The investigation of the landfill company, which Halaco now has sold off, has, on the other hand, not been formally concluded.
When Norwatch spoke with Monroy, he did not know that the Norwegians recently had sold their large shareholding in the company, only 3 years after they bought it.
It was the Canadian police who first tipped off the money-laundering unit in El Salvador that the then owners of the landfill company Mides were believed to have connections with the Canadian-Italian mafia. Ninety percent of the shares in Mides were at that time owned by a Canadian company named Cintec. When the authorities heard about several large money transfers between the Salvadoran company Mides and the main shareholder’s network of subsidiaries in the Caribbean and Central America, they both ended up being investigated for whitewashing of drug money.
The authorities did not become any less suspicious when the small Norwegian company Halaco bought all the Canadian shares in the landfill for $11 million in 2004. The transaction was made by complicated circuitous routes via intermediary companies in the Caribbean and Panama, which aroused the authorities’ interest even more.
When Halaco bought the shares, they too came under suspicion. The Salvadoran authorities requested Norwegian help, and the Oslo police’s report was sent to the Central American country in the second half of 2005. The Salvadorans were looking for possible ownership connections between Halaco and Cintec, plus details of Halaco’s and Halaco’s owners’ records.
Out of the Case
Public prosecutor Monroy has now informed Norwatch that they have not found what they were looking for and that Halaco, including president Hans Troye and its CEO Lars Christian Ly, therefore has been cleared from the case.
The investigation has been extremely complicated and taken many years. That the report from the Oslo police was sent in Norwegian did not make the case any easier for the Spanish-speaking investigators.
Monroy reported that the investigation is not formally concluded but has been put on ice.
Halaco’s chairman of the board, Lars Christian Ly, did not, after the new turn in the case, wish to make any comments to Norwatch.
The previous owners of Cintec have previously denied to Norwatch that they have participated in organized crime.