Congolese prosecutors are investigating a 200-million-euro ($222 million) line of credit issued to state mining company Gecamines by a company owned by Israeli billionaire Dan Gertler, who is under U.S. sanctions, Gecamines said on Monday.
Two sources at the Democratic Republic of Congo’s prosecutor’s office and two at the presidency, speaking on condition of anonymity, told Reuters that the investigation was focused on possible money laundering and fraud related to a loan issued in October 2017 by Gertler’s Fleurette Group.
In a statement, Gecamines interim director general Jacques Kamenga confirmed that a company official was questioned by prosecutors last week, without naming the person. Kamenga denied any wrongdoing and said Gecamines provided investigators with all requested documents.
A spokesperson for Gertler declined immediate comment. A representative of the prosecutor’s office declined to comment. Fleurette sold its main assets, stakes in two copper and cobalt mines in Congo, in February 2017. Its website no longer works and Reuters could not find any current contact details.
Kamenga could not be immediately reached by Reuters for comment.
Both Gecamines and Gertler have faced corruption allegations from watchdog groups over the past decade related to the sale of mining assets in Congo, which, despite copious mineral resources, is one of the world’s poorest countries.
According to a 2013 report by the Africa Progress Panel, which was headed by former UN Secretary-General Kofi Annan, Congo lost out on $1.36 billion in potential revenue between 2010 and 2012 in five mining deals involving Gecamines and Gertler.
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The U.S. Treasury sanctioned Gertler and more than a dozen of his businesses, including Fleurette, in December 2017, accusing him of using his friendship with former Congo President Joseph Kabila to secure sweetheart mining deals.
Gertler, Kabila and Gecamines have denied all allegations of impropriety.
Gecamines’ Kamenga said the company ended up borrowing 128 million euros from Fleurette Group’s line of credit in October 2017, two months before the U.S. imposed sanctions. Kamenga said Gecamines used the money to pay tax advances in Congo.
Fleurette was a joint venture partner of Gecamines in one Congo copper mine and said in 2014 that it lent Gecamines $196 million in 2013 to purchase two other copper mines.
Because of the U.S. sanctions against Gertler and Fleurette Group, Gecamines was advised by its lawyers not to reimburse the loan, Kamenga said in his statement on Monday.
Ventora, another Gertler-owned company, sued Gecamines in October for repayment of the loan and a Congolese court ordered Gecamines last month to pay nearly 152 million euros of the loan principal and interest, Kamenga said. Gecamines has appealed the ruling and not yet made any payment, he added.
On December 17, Kamenga and another Gecamines official were prevented by immigration authorities from boarding a flight in the Congolese capital Kinshasa and told they were banned from traveling, Kamenga said.
Two days later, they were summoned by the prosecutor’s office in Kinshasa, where a Gecamines official was questioned about the loan, Kamenga said.
The four sources at the prosecutor’s office and the presidency said that the chairman of the Gecamines board, Albert Yuma, had been also banned from leaving the country.
Yuma is a close ally of Kabila, who left office in January after 18 years as president. Reached for comment, Yuma referred Reuters to Kamenga’s statement.