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Home›Serbian loans›Chinese tech giant Huawei paid Serbian company $ 1million using offshore companies

Chinese tech giant Huawei paid Serbian company $ 1million using offshore companies

By Corey Owens
October 31, 2021
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Chinese tech giant Huawei has signed deals to make large payments to two men close to Serbia’s state-owned telecommunications company, using offshore companies that financial crime experts say are raising signals of corruption alarm.

One of these men, former Telekom Srbija executive Igor Jecl, appears to have received more than $ 1.4 million in contracts, dividends, loans, consultancy fees and an apartment from an offshore company that has been paid off. by Huawei for advice.

None of the offshore companies that have dealt with Huawei have a public record of consulting work, nor any company at all.

“It’s common for bribes and corruption to disguise them as consultants,” said Graham Barrow, a financial crime expert.

Although OCCRP did not find any evidence that the payments were inappropriate, they were made over a period of time when Huawei was doing business in Serbia. In 2016, he landed a € 150 million deal to modernize Serbia’s telecommunications infrastructure.

Journalists discovered the deals via the Pandora Papers, a leak of nearly 12 million documents from 14 offshore service providers obtained by the International Consortium of Investigative Journalists and shared with news outlets such as KRIK and OCCRP. They provide insight into how the rich and powerful hide money in secret jurisdictions like Panama and the British Virgin Islands.

The documents suggest that Jecl was not only dealing with Huawei, but was operating an existing offshore structure set up by another person: Milorad Ignjačević, a prominent Serbian lawyer who had business ties to Telekom.

Pandora Papers documents only provide a brief overview of how Jecl and Ignacevic’s companies operate, but among them are several invoices showing scheduled offshore payments, supported by contracts with Huawei.

Together, the two companies had at least six of these contracts, for which they issued invoices to collect at least 947,399 euros (roughly $ 1.1 million). Four of the contracts were ceded from one of their shell companies in Panama to another in the British Virgin Islands for reasons that were not explained.

One of the invoices sent by Jecl’s offshore company to Huawei, for 150,000 euros.
The Pandora Papers contain full details of only one of these contracts. Signed on January 1, 2014, it stipulates that the consultant would be paid 359,000 euros (over $ 493,000) to organize meetings for Huawei with Serbian telecommunications officials and executives.

The consultant is also asked to help Huawei obtain approvals and licenses, and “urge the customer [Telekom] to make payment to Huawei timely and quickly. Another document from the Pandora Papers shows that the contract has been fulfilled and that the 359,000 euros have been paid.

The new revelations about the Serbian deals come amid widespread mistrust of Huawei, which is launching its 5G networks around the world. Australia, the United States and the United Kingdom have all banned Huawei from building 5G infrastructure for fear that China would use it to spy. US officials have pointed to the military record of Huawei founder Ren Zhengfei, while the company has said it will “categorically refuse to comply” with any espionage order.

Amid a Chinese push to expand its political influence in the Balkans, Telekom Srbija – where Jecl was department head from 2005 to 2008 – began purchasing equipment from Huawei in 2006. A decade later, the two companies moved signed an agreement of 150 million euros to overhaul Serbia’s communication network under conditions that remain opaque.

Vladimir Lucic, the current CEO of Telekom, said he was totally unaware of the advice deal and was not aware of any advice. He called it “shocking”.

“It is unnecessary and it is shameful,” he said. “Huawei and Telekom would not have needed it because they are two large multinational companies. “

Illicit financing experts told OCCRP that Huawei’s offshore deal with Jecl and Ignjačević raised red flags.

Barrow said the setup was “similar in all respects to others that I have seen that have been put in place purely for the purpose of receiving bribes.”

“I’m not going to say it’s definitely corruption,” he added, “but it’s very hard to tell.”

Ross Delston, a Washington-based anti-money laundering specialist, said the amounts paid to offshore companies for advice also appeared unusually high.

“It’s a lot of money for a consulting contract, a lot of money,” he said. “No doubt, it’s strange. Corporate ownership is strange. Why not hire a Serbian company? “

Jecl, now 56, joined Telekom in 2005 after serving for two years as an advisor to the company’s former CEO Drasko Petrović, who has ties to the Democratic Party of Serbia. He was seen as an innovator in the state-owned company, where he was involved in large projects to bring broadband internet and internet radio to Serbia. But he resigned in 2008 and disappeared from the public eye.

“I haven’t had any contact with him since he left Telekom,” said Lucic, the former CEO.

Now his name has resurfaced in the Pandora Papers – among documents leaked by a British Virgin Islands law firm, where he became the owner of a shell company called Rofly Investments Ltd. in December 2015.


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