Sweden is in the middle of intensive negotiations with Turkey about future NATO membership. At the same time, another process has been underway at an individual Swedish authority, regarding whether Sweden should support a large Turkish deal.
It is about a railway project that is a high priority for the Turkish government.
The authority Exportkreditnämnden (EKN) has for a long time discussed and investigated the possibility of entering as a guarantor for a loan of just over three billion kroner to finance the project, in exchange for the use of Swedish goods and services.
The authority’s internal investigation shows high risks with the project. In six out of eight points, the risks are judged to be at the highest possible level. Among other things around health and safety, working conditions and biological diversity.
Anti-corruption expert Louise Brown has also pointed out Sweden’s intended business partner as known for corruption and tax evasion in the billions range.
Despite all the warning signs received the green light for the deal this summer from EKN’s board, as long as a number of conditions were met.
One of Sweden’s demands has been that the large Turkish group, called Rönesans, should leave Russia, where they operate several companies. The group’s Russian connections have been a source of concern for the Swedish authorities, as can be seen from a large amount of documentation and e-mail correspondence that DN has seen.
Photo: Sergei Karpukhin/ITAR-TASS/TT
Rönesans, whose owner Erman Illicak has close ties to the Turkish president, has assured EKN that the group intends to meet the conditions. This despite the fact that Russia is an important market for Rönesans, which accounted for almost 40 percent of their revenue.
DN can now reveal that Rönesans tried to mislead Sweden in the big billion-dollar deal. The group has not left Russia at all. Our review shows, on the contrary, that the group is betting on the Russian market and is recruiting staff in both St. Petersburg and Murmansk in northwestern Russia – amid the country’s ongoing war of aggression against Ukraine.
Online, one of the group’s personnel managers urged people to apply for jobs in Russia as recently as last week.
“A fantastic opportunity for engineers in steel construction who want to continue their careers in Russia!”, comments the manager of one of the series of vacant jobs in the country.
Both the post and the job ads were deleted shortly after we started asking questions.
Photo: Renaissance Heavy Industries
The review also shows that several of the Rönesans Group’s companies based in Russia have continued to submit a form of declaration to Russian authorities during the summer and autumn. Something which, according to the Eastern Economic Institute at the School of Economics, should be interpreted as the companies being active.
Both the Turkish government and the bank involved, which will be responsible for the loan for which EKN acts as guarantor, have been keen that Sweden fully approves the billion-dollar deal.
At the end of August, DN was able to tell how Turkey started to pressure Sweden from the highest place. A high-ranking manager at the Turkish Ministry of Finance contacted EKN personally, and wanted to emphasize that the company in question has Turkish ownership.
Photo: Burhan Ozbilici/AP
“Therefore, we kindly expect the Swedish government and EKN to continue to support the project,” wrote the Turkish government representative.
But EKN has continued to ask control questions. Something that made representatives of the major American bank involved, JP Morgan Chase, see red.
DN can now reveal how the bank, which is one of the absolute largest in the world, has warned EKN and Sweden in the autumn of the consequences if the deal is not approved.
“If [detta underlag] is not enough to meet EKN’s demands, to be honest, it is time for Swedish diplomats to prepare to explain to the Turkish government why they do not approve the railway financing,” the bank wrote to EKN in August.
Photo: Screenshot
The deal has now been paused from Sweden’s side, because Rönesans has not fulfilled its conditions. In an internal document from the end of November, which we have seen, it is stated that Rönesans “lacked reliability and transparency in its communication with EKN”.
The authority does not want give any interview about the deal, but confirms that the deal is on hold.
– After EKN has carefully evaluated and analyzed all the information received since the decision in June, it will be difficult to confirm in the foreseeable future that all EKN’s conditions can be met, says Malin Alm Gerentz, press communicator at EKN.
Neither Rönesans nor the Turkish Ministry of Finance could be reached for comment. JP Morgan Chase has said it does not wish to comment. EKN and the Ministry of Foreign Affairs have previously denied that the deal has any connections to Sweden’s NATO process.
Read more:
The emails show: The Speaker wants to go to Turkey to help with NATO
Delayed NATO membership worries the Baltics
Billström: Sweden is making progress in the talks with Turkey
The emails reveal: Turkey pressured Sweden to approve high-risk business
Tags: major Turkish company misled Sweden billiondollar deal
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