Expatica news

Port boss quits in EUR 100m loan scandal

31 August 2004

AMSTERDAM — The general director of Rotterdam Port has resigned following revelations that he secretly agreed a EUR 100 million loan guarantee for the struggling Rotterdam Dry Dock Company (RDM) without informing fellow executives or the City Council.

Port boss Willem Scholten acted in 2002 as guarantor via two banks for the loan to ensure that Rotterdam Port gained several production contracts such as submarine construction orders, news agency ANP reported.

But he failed to inform the port’s board of directors or commissioners. Rotterdam executive council made up of the city’s mayor and aldermen and women was also unaware of the agreement.

After the two banks demanded repayment of the money, Scholten officially informed the board of commissioners last week. But whether the port will be confronted with the full bill will require further examination.

The chairman of the Rotterdam board of directors and Port Alderman for Rotterdam Council, Wim van Sluis, said the amount involved is at least EUR 90 million. The total figure being reported is about EUR 100 million.

When the guarantees were recently 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, newspaper De Volkskrant reported.

The guarantees were necessary at the time to ensure a line of credit to four subsidiaries of RDM Holding. One of the companies was involved in the intended production of the German-Dutch armoured military vehicle, Fennek.

And according to the Rotterdam executive council, Scholten agreed under extreme pressure to act as guarantor when Rotterdam — which owns the port — was at threat of losing the order.

There are also rumors that the guarantees were connected with submarine construction orders for Taiwan.

But Van Sluis has refused to describe the controversy as fraud, confirming that the port has not lodged a police report. He said the port wanted to await the results of an investigation, which will take between two to three weeks.

Scholten will remain available for consultation during the period of inquiry and will officially vacate his position on 1 January. Former Rabobank board chairman and former Schiphol Airpoirt chief Hans Smits has temporarily replaced him on the board of directors.

[Copyright Expatica News 2004]

Subject: Dutch news