Ex-CEO of Pemex Arrested for “Looting Mexico”

Now attention is switching to former President of Mexico Peña Nieto

Emilio Lozoya, former CEO of state oil company Pemex who went on the run last May after being accused of serious financial irregularities during his tenure, was arrested in an upscale suburb of the Southern Spanish port city of Malaga on Wednesday. Lozoya is accused of taking part in an elaborate scheme designed to systematically “plunder” Mexico’s finances, according to the country’s Attorney General Alejandro Gertz Manero.

Lozoya is under investigation for his alleged involvement in Pemex’s repurchase, for the obscenely inflated sum of $665 million, of two fertilizer plants that the oil company had sold to private investors many years earlier. One of the plants hadn’t been operational for 14 years — and still isn’t — while the other one operated well below capacity. Before the purchase of the fertilizer plants, international auditors warned Pemex’s board of their dire state, but the company went ahead with the purchase anyway.

Such reckless lavishness was a constant feature of Lozoya’s tenure as CEO of Pemex. “It was conduct that was repeated in a very structured way with the aim of looting the country. I don’t see any other way to describe it,” says Gertz Manero.

A one-time senior election campaign advisor and trusted confidante of former Mexican President Enrique Peña Nieto, Lozoya is also accused of receiving millions of dollars in bribes from scandal-plagued Brazilian construction firm Odebrecht in exchange for his support in obtaining public work contracts. The money reportedly passed through shell companies in the British Virgin Islands before coming to rest in private bank accounts belonging to Lozoya in Switzerland, Liechtenstein, and Monaco.

Lozoya was CEO of Pemex from 2012 to 2016, during which time the company’s already fragile financial health underwent a dramatic turn for the worse. By early 2016 the group’s total sales had plunged by 21%, production had slumped 24%, its annual operating losses had soared to a record high of almost $30 billion, and its total debt load had grown from $64 billion in 2012 to $106 billion. Today, even after a couple of bailouts last year, it’s still above $100 billion, of which roughly $85 billion is owed to bondholders.

Continue reading the article on Wolf Street

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