The turn of the year, January 2015 saw twenty four board directors of MediaPro, Romania arrested on suspicion of tax evasion and money laundering. At the same time major shareholder and billionaire heir to the Estée Lauder fortune, Ronald S Lauder, despite still being the head of the firm, was not arrested.
MediaPro are Romania’s biggest Media Company and one of the rising Media stars in Eastern Europe. From humble beginnings in the 1950’s this company is now responsible for a much of the movie output of the entire country and have a string of successful movie releases behind them.
According to Romanian investigators however the information they are working on is that over a five year period up to to 2014 the board of MediaPro was responsible for hiding cash through dummy invoices, a large proportion of which was siphoned off to an unnamed organiser of the money laundering scheme.
These are particularly strong allegations against this Media giant and of course this sort of allegation would need to be proven in court which is likely to be a very lengthy process. Investigators however are convinced that they will be able to compile enough evidence to bring the case to trial fairly shortly.
Meanwhile the head of the company, Ronald Lauder, despite resigning from the board in March 2014, has remained the major shareholder of the company. His resignation came shortly after the exit of his long-term business partner Adrian Sârbu, who was subsequently placed under arrest by Romanian police on 3 February 2015.
Mr Lauder has a $3.9 billion fortune based around his ownership of over thirty other Media companies in Europe which adds to the wealth acquired by his parents who set up leading cosmetics brand Estée Lauder. He is a well-known businessman in Jewish communities; particularly for his philanthropic work however this does not stop him having critics.
Public record shows that Mr Lauder withdrew tens of millions of dollars from the company in 2014, causing widespread outrage among the Romanian public and media. Ironically as MediaPro are massively influential in Romania, particularly with the press, the story is largely going unnoticed. Despite so much of this appearing in the public domain the reports about it are few and far between.
Investigators are keen to understand who all the people were in this alleged money laundering operation and Romanian authorities are still pursuing the investigation. In January they arranged for the extended detention of eleven Company executives implicated in this case.
Whilst investigators try to join the dots on this alleged money laundering scheme we will just have to wait to see how it affects Mr Lauder and his fellow board members.
