Oil Trader Faces Legal Storm Over Iran Sanctions
Monday, Nov 18, 2024 12:35 am ET
4min read Francesco Mazzagatti, the founder of Viaro Energy Ltd., is facing a legal storm over his alleged involvement with Mehr Petrochemical Co., an Iranian company hit by US sanctions. The London lawsuit, filed by Alliance Petrochemical Investment (API), accuses Mazzagatti of diverting money from Mehr and misconduct, potentially impacting Viaro's acquisition of UK gas assets from Shell and Exxon.
The lawsuit alleges that Mazzagatti effectively ran API, even after stepping down from the board, and dealt with Mehr as if he remained CEO. API is suing for $143 million, plus damages, claiming that Mazzagatti diverted funds from the sale of Mehr products to a separate corporate vehicle in the UAE. The suit also accuses Mazzagatti of misconduct through 2021, including producing a faked bank document and profiting from forged signatures.
Mazzagatti denies the allegations and calls the complaint part of a "vexatious campaign" by Arshiya Jahanpour, a former business partner who he says actually runs API. His spokesperson stated that Mazzagatti is not subject to any inquiry or scrutiny related to his dealings with Mehr.
Viaro Energy is seeking regulatory approval for a set of deals with Shell and Exxon off the Scottish coast, which would give it control of about 5% of the UK's total gas output. The North Sea Transition Authority (NSTA) can consider the "fitness" of a licensee as part of its approval process, and Mazzagatti's legal issues may influence this assessment.
The Milan criminal trial, where Mazzagatti is one of about a half dozen defendants facing charges related to a corruption case, could also impact Viaro's acquisition plans. In a narrow part of the case, Mazzagatti is accused of using proceeds from an allegedly fraudulent deal with Eni SpA to buy the stake in API.
The US Treasury designated Mehr as part of a "shadow banking network" supporting Iran's regime, highlighting the risks for companies entangled in such transactions. With the US imposing sanctions on six entities engaged in Iran's petroleum trade and identifying six vessels as blocked property, other energy traders and companies should be wary of potential fallout.
As the case against Mazzagatti proceeds, it serves as a cautionary tale for the industry, emphasizing the importance of thorough due diligence and compliance with US sanctions to avoid reputational damage and legal consequences. The outcome of the London lawsuit and the Milan criminal trial could significantly impact the broader energy market's perception of risk and compliance with US sanctions against Iran.
The lawsuit alleges that Mazzagatti effectively ran API, even after stepping down from the board, and dealt with Mehr as if he remained CEO. API is suing for $143 million, plus damages, claiming that Mazzagatti diverted funds from the sale of Mehr products to a separate corporate vehicle in the UAE. The suit also accuses Mazzagatti of misconduct through 2021, including producing a faked bank document and profiting from forged signatures.
Mazzagatti denies the allegations and calls the complaint part of a "vexatious campaign" by Arshiya Jahanpour, a former business partner who he says actually runs API. His spokesperson stated that Mazzagatti is not subject to any inquiry or scrutiny related to his dealings with Mehr.
Viaro Energy is seeking regulatory approval for a set of deals with Shell and Exxon off the Scottish coast, which would give it control of about 5% of the UK's total gas output. The North Sea Transition Authority (NSTA) can consider the "fitness" of a licensee as part of its approval process, and Mazzagatti's legal issues may influence this assessment.
The Milan criminal trial, where Mazzagatti is one of about a half dozen defendants facing charges related to a corruption case, could also impact Viaro's acquisition plans. In a narrow part of the case, Mazzagatti is accused of using proceeds from an allegedly fraudulent deal with Eni SpA to buy the stake in API.
The US Treasury designated Mehr as part of a "shadow banking network" supporting Iran's regime, highlighting the risks for companies entangled in such transactions. With the US imposing sanctions on six entities engaged in Iran's petroleum trade and identifying six vessels as blocked property, other energy traders and companies should be wary of potential fallout.
As the case against Mazzagatti proceeds, it serves as a cautionary tale for the industry, emphasizing the importance of thorough due diligence and compliance with US sanctions to avoid reputational damage and legal consequences. The outcome of the London lawsuit and the Milan criminal trial could significantly impact the broader energy market's perception of risk and compliance with US sanctions against Iran.
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