The company chosen by Italy’s government to take over the country’s largest oil refinery from its Russian owner has links to mining executive Beny Steinmetz, who was convicted of corruption.
The ties between the Franco-Israeli billionaire and GOI Energy, which bought the Sicilian refinery from Lukoil this year with support from the commodity trader Trafigura, raise questions over the sale and ownership of an asset Rome deems strategic.
Steinmetz, who was convicted of corruption in Switzerland and Romania, travelled to Rome and Milan in November and December 2022 to discuss a €1.5bn bid for the refinery with lawyers and advisers, according to four people with knowledge of the meetings.
Steinmetz was accompanied by Alexia Bakoyannis on these trips, according to three of the people. She is the niece of Greek prime minister Kyriakos Mitsotakis and owns shares in Cyprus-based GOI Energy, of which she was also briefly a board member, according to company records.
A Steinmetz family foundation is also an investor in Argus New Energy Fund, the largest shareholder in GOI Energy, according to classified documents used by the Italian government to approve the transaction.
Another link is the chief executive of GOI Energy, Michael Bobrov, who holds a stake in the Cyprus company and is also a shareholder in a refinery owned by sons-in-law of Steinmetz in Israel.
The forced sale of the Sicilian plant, which accounts for a fifth of Italy’s refining capacity, took place as the EU was preparing to ban imports of Russian seaborne and petroleum products in December last year. Rome exercised its golden powers, which give it the right to veto deals or impose requirements over the purchase of strategic assets.
Despite concerns raised by the US, the government run by Giorgia Meloni approved the sale to GOI Energy after the company outbid US private equity firm Crossbridge and Swiss commodity trader Vitol. It had also offered stronger reassurances over jobs and operations, the government said at the time.
“The ISAB refinery is a critical part of Italy’s refining system, accounting for 30 per cent of its diesel supply and 20 per cent of total capacity,” said Viktor Katona, analyst at data provider Kpler. “When Europe’s third-largest refinery ends up being sold to a mostly unknown company, that does definitely raise eyebrows.”
In September, Steinmetz was arrested in Cyprus on the basis of a European Arrest Warrant issued by Romania, where he was convicted in 2020 and sentenced to five years in jail for corruption in a real estate fraud case. The 67-year-old executive was released this month after the Cypriot supreme court overturned an earlier extradition ruling.
Steinmetz has said the Romanian trial and sentence were politically motivated. Italy and Greece also refused to carry out Bucharest’s arrest warrant.
The billionaire was handed another bribery conviction in 2021 from a Swiss court following a mining case involving the acquisition of Guinean iron-ore fields. Steinmetz has appealed against the decision.
The scion of a diamond business dynasty, Steinmetz expanded the family fortune in the late 1980s. BSG Resources operates in 25 countries with activities spanning mining, oil and gas, and metals.
GOI Energy said that “a foundation, whose [ultimate beneficial owners] include members of Mr Steinmetz’s family (but not Mr Steinmetz) is a minority investor in the Argus fund, as it has obviously been fully disclosed to the Italian competent authorities”.
They said that Steinmetz was not an investor in GOI Energy.
Steinmetz’s sons-in-law Ohad and Eder Schwartz jointly own Israel-based Green Oil Israel, which operates the Bazan refinery located in Haifa Bay, northern Israel, according to Israeli records. Bobrov also owns a 50 per cent stake in the Bazan refinery, the records show.
In response to questions, the Italian industry ministry said the golden powers are designed to preserve energy security, adding: “In-depth studies were carried out on the financiers/investors involved . . . as well as on the relationships between Green Oil (Israel) Ltd . . . and members of the Steinmetz family.”
Bakoyannis also assisted Steinmetz in Cyprus as his communications adviser when he was fighting extradition to Romania, according to statements related to the proceedings.
GOI Energy said any questions about Steinmetz’s meetings in Italy with GOI Energy’s lawyers in December 2022 “should be referred to Mr Steinmetz”, adding that Steinmetz “does not in any way represent GOI Energy”. A spokesperson for Steinmetz in Israel, referred to the Financial Times by Bakoyannis, could not comment.
Italian officials said that Rome’s primary focus was to ensure no Russian investors or crude would be secretly channelled back into the refinery.
Italy was comforted that under the terms of the GOI Energy deal crude and working capital for the refinery is being supplied by Trafigura, the people said. Bobrov previously worked for Trafigura as head of the trader’s Israel operations. Trafigura declined to comment.
One Italian who reviewed the Cypriot offer said: “We were comforted by the fact the Cypriot fund had no link to the Russians, and that Steinmetz had a record of running similar operations as his family and Bobrov also own the Bazan refinery in Israel.”
The Cypriot company records show that 76 per cent of GOI Energy is held by Argus New Energy Fund, whose shareholders are two Nicosia-based lawyers. Bobrov owns a 20 per cent stake.
The remaining 4 per cent is evenly split between Completicos Holdings, of which Bakoyannis is a shareholder, and Itzik Gur, according to company records. Gur is an Israeli national who was listed as a Steinmetz “associate” in a New York state court subpoena. Gur could not be reached for comment.
GOI Energy said that Bakoyannis, Bobrov and Gur were “all independent businesspeople . . . with an extensive portfolio of clients, partnerships and collaborations”.
Additional reporting by Tom Wilson in London
This story has been updated to reflect the fact that Trafigura ended up supplying crude to the refinery as had been planned
Read the full article here