Tue | Dec 1, 2020

Mexico freezes accounts of ex-oil official, steel maker

Published:Wednesday | May 29, 2019 | 12:30 AM
Former head of Mexico’s state-owned oil company Pemex Emilio Lozoya, at centre.
Former head of Mexico’s state-owned oil company Pemex Emilio Lozoya, at centre.

Mexican authorities have frozen the bank accounts of Emilio Lozoya, the former head of Mexico’s state-owned oil company, and those of steel maker Altos Hornos de Mexico.

The Financial Intelligence Unit said Monday that “there were various transactions with funds that presumably did not come from legal activities” and the funds “are presumed to have originated in acts of corruption”.

In a statement, Altos Hornos de Mexico SA (AHMSA) called the freezing of its accounts “without precedent, arbitrary and in violation of every right.” The company said it employs more than 20,000 people and has thousands of suppliers. In a separate statement, AHMSA assured creditors that it would make its debt payments.

Lozoya headed state oil company Petroleos Mexicanos under former president Enrique Pena Nieto. Last week, the government banned Lozoya from holding public positions for 10 years.

Petroleos Mexicanos agreed to purchase fertiliser business Fertinal from AHMSA for US$635 million in 2015, when Lozoya headed Pemex.

Mexican President Andrés Manuel López Obrador said Tuesday that Pemex overpaid when it purchased the fertiliser plant. Now the government must decide whether to put more money into the plant or bring in a private partner.

“I would very much like to re-establish fertiliser production, and for us to be self-sufficient,” said López Obrador.

Lozoya and AHMSA have also been mentioned, but not charged, in corruption scandals involving Brazilian construction giant Odebrecht.

Former Odebrecht officials have given evidence to Brazilian prosecutors that implicates Lozoya in the company’s bribery scandal. Lozoya has denied receiving bribes.

AHMSA paid US$3.7 billion in 2014 to a company called Grangemouth, which it said was hired to advise on selection and pricing of equipment and to facilitate purchases of metallurgical coal to produce steel. Grangemouth has been identified as a possible shell company for Odebrecht.

AP