Italy launches probe into €1.25bn PPE contract with China

Prosecutors say Italian business owners pocketed €65m after illegally acting as middlemen Italy initially struggled to provide PPE to health workers and there was a two-month long shortage of face masks in stores © Marco Bertorello/AFP/Getty Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Silvia Sciorilli Borrelli in Milan FEBRUARY 18 2021

Source… https://www.ft.com/content/ae05d6be-4787-4b07-b13c-d4c0b9b57829

Italian prosecutors have launched an investigation into a €1.25bn government purchase of PPE from China, saying a group of businessmen were paid tens of millions of euros in illegal commissions to secure the contracts. According to prosecutors in Rome, four Italian companies — Sunsky, Partecipazioni, Microproducts It and Guernica — “illicitly served as concealed intermediaries” between the government and a Chinese consortium for the purchase of personal protective equipment, receiving illegal payments from the Wenzhou-based groups. Italy was the first country in Europe to be hit hard by the pandemic, with the death toll exceeding 35,000 during the first wave. The government initially struggled to provide PPE to health workers and there was a two-month long shortage of face masks in stores. In March, Italy’s emergency Covid-19 commissioner’s office handed three Chinese companies — Wenzhou Moon-Ray, Wenzhou Light and Luokai Trade — a contract for 800m face masks. The tender was awarded because of mediation by the Italian companies’ owners, who received tens of millions of euros from the Chinese companies, according to court documents seen by the Financial Times. Luokai Trade, they showed, had been incorporated in China just five days before the Italian government’s order was formalised. Andrea Vincenzo Tommasi, chief executive of Sunsky; his business partner Daniele Guidi, former chief of San Marino national bank, which is being probed over its bankruptcy; and Mario Benotti, founder of Microproducts It and a former executive at Italy’s public broadcaster, Rai, are under investigation for money laundering, possession of stolen goods and illicit traffic of influences, prosecutors said on Thursday.  The monetary unit of the Guardia di Finanza, Italy’s financial police, seized assets worth more than €70m, including bank accounts, company stakes, real estate, jewellery and yachts, belonging to eight people under investigation. According to court documents seen by the Financial Times, Sunsky, was paid €59.7m by the Chinese companies for delivering the face masks to Italy. Jorge Solis, a Rome-based Ecuadorean entrepreneur and a friend of Guidi, was paid €5.8m for putting the Chinese in touch with the Italian intermediaries.  Benotti, a longtime acquaintance of Domenico Arcuri, Italy’s emergency commissioner for the pandemic response, was paid €12m by the Chinese consortium for introducing Solis and Tommasi to the commissioner’s office, according to the filing. The payments were “illicit” because they were based on “concealed commercial mediation activities linked to personal relations with the Covid commissioner [Arcuri]”, the documents said. The public tender did not follow standard procedures, prosecutors said. Benotti, through his lawyers, said he acted on a mandate from Arcuri, who was appointed Covid commissioner last March.  Arcuri, who also heads Invitalia, the national investments agency, and oversaw business crises at national carrier Alitalia and ArcelorMittal’s Apulian steel plant Ilva, told the press in a statement that “his name had been illegally exploited by the people under investigation” and he would consider legal action against them.

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The court documents show 1,280 telephone contacts between Arcuri and Benotti between January and May 2020. Prosecutors said there was no evidence of payments from the commissioner’s office to any company and therefore they were not investigating any public office for corruption. Last month Solis, told Italy’s La7 television, which first reported on anomalies around the €1.25bn contract in December, that he had been called by Arcuri’s aide last year who told him: “I want you to help Italy” because they knew he regularly did business with the Chinese companies. According to the court filing, the Bank of Italy’s anti-money laundering office had already flagged the Chinese companies’ bank transfers to the corporate accounts of Solis, Benotti and Tommasi as “suspicious”.

Source… https://www.ft.com/content/ae05d6be-4787-4b07-b13c-d4c0b9b57829

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