A Russian sales manager working for the automation division of power and process company Metso, apparently skimmed money off invoices and cycled the funds through several bank accounts and firms until they ended up in an offshore company he owned in Panama. The revelation came as Yle continued its coverage of Finnish individuals and companies mentioned in the Panama Papers data leak. Metso and the man have since parted ways.
Documents uncovered by Yle MOT’s journalist in the so-called Panama Papers indicate that a Russian sales manager working for Metso Automation had passed money from an offshore company he owned to Metso and then back to his own offshore company in a tax haven.
The Panama-registered company owned by the former Metso employee paid an invoice to Metso Automation in Finland via a Swiss bank account. According to the documents the invoice covered the cost of valves and commissions. The valves were sold to another Russian company.
When Metso Automation received the money the Russian company, it then sold the valves forward to a Swedish company headed up by another Russian man. As the deal progressed through the various stages, the price of the valves increased by nearly six-fold.
The Metso employee then skimmed the excess money off the deal and directed it to his company account in Panama. The documents indicated that the employee had engaged in similar transactions on several occasions.
Yle’s MOT programme asked Metso’s former SVP of Internal Audit to review the Panama Papers documents. He said that in his view the financial transactions exhibited clear signs of money laundering.
Shady deal overlooked by internal audit
An internal audit by Metso Automation failed to detect anything suspicious about the valve deals and did not intervene in the matter. Irregularities related to the transactions came to light when an MOT journalist asked the company to comment on the financial transfers for the programme. Metso Automation, in which the Finnish state holds a fifteen percent stake, then conducted an internal investigation upon hearing of the matter.
“We take this case very seriously,” said Metso chief financial officer Harri Nikunen.
According to Nikunen it is mainly the responsibility of the banks to review payments made to Metso, in other words the company does not itself analyse payments originating from countries known to be tax havens. However the company said that it does assess outbound payments to some 30 known tax havens.
“In principle payments from us to so-called tax havens are stopped and checked to see what they’re about,” the CFO added.
Employee let go for cooking books
Metso said that its internal investigation did not reveal any signs that the company itself had been engaged in any irregularities. On the other hand, it found that the Russian sales manager had orchestrated the entire affair. The company said that it also did not suffer financially from the shady deals. However the audit had been incriminating as far as the employee was concerned, it noted.
“The investigation revealed a possible conflict of interest situation, and in order to avoid it, the employment contract of the worker in question was terminated by mutual agreement,” Metso’s communications team told Yle.