City cleared in affair over port's 'illegal' financing

15th October 2004, Comments 0 comments

15 October 2004 , AMSTERDAM — Rotterdam Council could not be blamed for the issuing of EUR 183.5 million in bank guarantees by the Port of Rotterdam for the embattled RDM company of businessman Joep van den Nieuwenhuyzen, an inquiry found Friday.

15 October 2004

AMSTERDAM — Rotterdam Council could not be blamed for the issuing of EUR 183.5 million in bank guarantees by the Port of Rotterdam for the embattled RDM company of businessman Joep van den Nieuwenhuyzen, an inquiry found Friday.

Christian Democrat CDA Senator Wolter Lemstra — who investigated the affair — found that former general port director, Willem Scholten, consciously overstepped his authority by issuing the bank guarantees.

Rotterdam was stripped of any blame because Scholten informed the council "incorrectly, inadequately and too late". But the senator also said that the council gave Scholten too much rope, Dutch public news service NOS reported.

The researchers concluded that Scholten acted alone and that no one in the Rotterdam Executive Council — made up of the city's mayor and aldermen and women — knew what the former director was doing.

It was also alleged that Scholten — who resigned over the scandal at the end of August — listened more to Van den Nieuwenhuyzen than the council or port colleagues.

The findings backed the results of a previous investigation conducted by accountancy firm PriceWaterhouseCoopers.

Port boss Scholten agreed in total EUR 183.5 million in bank guarantees for the Rotterdam Dry Dock company (RDM) of Joep van den Nieuwenhuyzen in 2002.

The guarantees were given to ensure that the port gained several production contracts such as submarine construction orders. The guarantees were necessary to ensure a line of credit to four RDM subsidiaries.

When the guarantees were later turned into loans for RDM subsidiaries, the German Commerzbank and Britain's Barclays Bank demanded the money be repaid.

But several of the involved RDM companies have gone bankrupt and the remaining activities appear to be insufficient to cover the loans.

Lawyers now claim the guarantees are not legal and that the council cannot therefore be held responsible for them.

Lemstra — who launched the investigation five weeks ago — advised Rotterdam Council to in future remove the possibility of a director operating so autonomously.

But despite Friday's findings, the legal consequences of the scandal are not yet known. The public prosecutor has not yet intervened in the case and the city council is yet to lodge a police report. 

The Rotterdam auditor's office will examine the case next week to determine whether all questions the council has put forward have been adequately answered.

[Copyright Expatica News 2004]

Subject: Dutch news

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