Wedoany.com Report-Dec 04,  At the heart of Trafigura Group’s landmark Swiss corruption trial is hotly contested evidence from a man who for several years was one of the trading house’s most senior executives, but who won’t be anywhere near the courthouse.

Switzerland’s federal criminal court in Bellinzona on Tuesday rejected a request by Trafigura to have the testimony from convicted former executive Mariano Marcondes Ferraz thrown out.

The Brazilian trader, who ran the Angolan oil business being investigated, is not expected to appear at the trial taking place over the next few weeks. But Ferraz’s name is mentioned more than 200 times in Switzerland’s indictment of Trafigura — which is charged through its Dutch parent Trafigura Beheer BV — and three individuals, including former chief operating officer Mike Wainwright.

Ferraz’s evidence, given over the course of four interviews with prosecutors in 2022 and 2023, was the focus of much of the debate on the first day of proceedings. Lawyers for Trafigura and Wainwright asked for his testimony to be thrown out, arguing that it was tainted by being given as part of a cooperation agreement with prosecutors. Without it, they suggested, the whole case would collapse.

“No Mariano Ferraz, no indictment, no trial,” said Trafigura’s lawyer, Jean-Francois Ducrest. 

Brazilian and Swiss lawyers for Ferraz declined to comment. The four defendants, including a middleman who can only be referred to as P., and the alleged recipient of the bribes, Paulo Gouveia Junior, who was CEO of Sonangol Distribuidora SA, deny the charges against them. 

Sonangol Official

Gouveia Junior took the stand on Tuesday morning. The 65-year old was questioned by the presiding judge about Wyland Group, the company through which he was accused of accepting the equivalent of more than $4 million in bribes. 

Gouveia Junior said that creating the entity was Ferraz’s idea, as a way for him to quickly convert US dollars into kwanza, the Angolan currency the former Trafigura executive needed to run the local business at a time of wildly swinging inflation in the southern African country. 

“It was perhaps one of the errors I made was to not have administered the Wyland company myself,” he said. Asked why he didn’t push Ferraz for details on what the money was for, Gouveia Junior said “it would have been indiscreet for me to do so.”

When one of the Swiss prosecutors confronted Gouveia Junior with a letter from 2010 in which he, not Ferraz, sent instructions to the Geneva bank where Wyland had its account, Gouveia Junior said he couldn’t recall the specifics of that correspondence.   

Ferraz joined Trafigura in 2007, according to a biography in a company annual report, though Wainwright on Tuesday said that he hadn’t become an employee until 2008 or 2009.

He had previously worked for Glencore Plc and its predecessor Marc Rich + Co. — the trading house where Claude Dauphin and Trafigura’s other founders had cut their teeth. 

Championed by Dauphin, Ferraz became chief executive of the company’s Angolan joint-venture DT Group in 2009. That gave him a key role in a country that was an important source of business for Trafigura. 

It also placed Ferraz in proximity to local partners like Leopoldino Fragoso do Nascimento, a close associate of former Angolan President Jose Eduardo dos Santos. The Angolan official, commonly known as General Dino, was later placed under US sanctions for allegedly stealing billions of dollars through embezzlement. 

In 2014, when Dauphin stepped down as CEO due to ill health, Ferraz was elevated to Trafigura’s inner circle — its eight-man management board. 

His spell at the top was short. In 2016, he was arrested in Sao Paulo airport on his way to London, as part of the Brazil’s sweeping Car Wash corruption probe. 

Ferraz was accused of paying Petrobras’s then-director of oil procurement $868,450 in return for inflated price contracts for his company, Decal do Brasil, and eventually sentenced to 10 years in prison in 2018. While Trafigura was not involved in that case, in 2019, Ferraz agreed to collaborate with Brazilian prosecutors, and started giving evidence against his former colleagues.

That has already proved painful for Trafigura once this year: when the company pleaded guilty to US charges it paid bribes for oil deals, Ferraz was one of two Trafigura executives described as directing the bribes. The other was Dauphin.

Now Ferraz is once again a key figure in the Swiss trial, in which Trafigura is accused of bribing an Angolan official, Gouveia Junior, from 2009 to 2011. 

Trafigura’s lawyer Ducrest showed messages between Swiss and Brazilian prosecutors to the court on Monday, claiming that they had coordinated “a sophisticated and camouflaged operation” as to how Ferraz’s testimony was to be used in the case. 

Wainwright’s lawyer Daniel Kinzer said the fact that Ferraz was heard as a witness rather than as a defendant, given his role in the case, “is proof he was given a deal” and immunity from prosecution.

Swiss prosecutors never told Ferraz that he wouldn’t be a defendant or that he’d never be prosecuted, but only that any testimony he gave to the Swiss would not be used against him, the court ruled on Tuesday in rejecting Trafigura’s bid.