News / Report clears top IRU men of financial wrongdoing, but union may have 'misused members' funds

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An international road association, the IRU, says allegations of financial misconduct against it, made in April, should be dismissed following the findings of an independent report.

The allegations relate to the IRU’s TIR insurance scheme and date back to 1995 and the financial model used to calculate the union’s reserves.

But while the report clears individuals of any wrongdoing, it reveals that the IRU had indeed been involved as an organisation.

In addition, the IRU appears to have offered Sfr30m ($29.5m) in exchange for “‘silence” from its members following allegations that it hid more than Sfr550m of membership fees in offshore tax havens, including the Isle of Man.

Former IRU deputy secretary general Marek Retelski delivered a 343-page complaint to Swiss prosecutors in April alleging that secretary general Umberto de Pretto and chief operating officer Boris Blanche diverted some Sfr558m that should have been returned to members.

This amount included Sfr93m from a “secret retro-commission from member associations’ insurance contracts, through which 40% of the national premium was subsequently returned to a shadow company”. Mr Retelski claimed Mr de Pretto refused to notify member associations of the money, or return it to them.

Another Sfr56.7m was profit commissions from global insurance premiums paid by IRU members to Zurich and AXA.

The balance was said to relate to IRU reserves, which had a surplus of Sfr409m. It had been claimed that Mr Blanche hid a 2014 Deloitte analysis into the IRU’s funding requirements in the context of the TIR Carnet issuance activities, in which the consultant concluded there was a surplus.

The Loadstar understands that the funds have been used for various real estate investments projects in Turkey, Russia and Ukraine. It is not known whether members knew or approved of the projects.

On Friday, the IRU released a statement claiming that an independent audit by Ernst & Young had found no evidence against its management.

But in a report for the UN’s Inland Transport Committee, Paul Wang, a partner at Ernst & Young, said that the external audit was scoped on the personal involvement of Mr de Pretto and Mr Blanche in the allegations and did not include a financial audit of the IRU as an organisation.

While this report seems to clear the two men of any wrongdoing, it does note that as an organisation, the IRU had in fact been involved in forming the alleged schemes and had failed to notify members of them or their structure.

However, it found no evidence of an obligation to communicate the Deloitte analysis to corporate bodies or to its members.

However, Mr Wang also noted that the report was not focused on the legal aspects of the case, stating that as external auditor he was not mandated to provide judgment on the legal nature of any of the findings, including potentially illegal acts, neglects and wrongdoings.

Despite the IRU’s claims of innocence, a copy of its General Assembly meeting at the beginning of November has been made available to The Loadstar. In it, the IRU appears to offer its members a payment of Sfr30m in exchange for a full waiver of claims to stakeholders and audit rights.

When contacted for comment, the IRU declined, while whistleblower Mr Retelski would only say that he believed proceedings were ongoing.