Thursday, June 19, 2014

Cuba puts Canadian exec on trial; some investors put off

Cuba puts Canadian exec on trial; some investors put off
HAVANA Wed Jun 18, 2014 1:59pm EDT

(Reuters) - A Canadian executive held in Cuba for nearly three years has
gone on trial on bribery charges in a case closely watched by potential
investors who are wary of how Cuba treats foreign executives.

Prosecutors are seeking 15 years for Cy Tokmakjian, 74, and 12-year
sentences for his top managers, fellow Canadians Claudio Vetere and
Marco Puche, according to a western diplomat who has seen the charges
and asked not to be identified.

Fourteen Cuban defendants also face lengthy imprisonment if convicted.
The trial began last week behind closed doors and was scheduled to end
on Friday. A verdict and any sentencing usually follow within a few weeks.

Cuba shuttered their Canadian trading company, the Tokmakjian Group, in
September 2011, arrested Tokmakjian and took the passports of the other
managers. The charges include bribery, tax evasion and other economic

All three Canadians insist they are innocent. The company's
vice-president of finance, Lee Hacker, said this would be shown at trial.

"However, because of serious concerns with the lack of due process,
transparency and independence in the Cuban system, we fear that the
outcome has already been predetermined," Hacker said.

The case has strained Canada's relations with Cuba because Tokmakjian
was held nearly 2-1/2 years without charges.

Cuba has been touting a new foreign investment law that takes effect at
the end of June, saying the law is crucial to bringing in foreign direct
investment needed for development.

The main feature of the law was to lower taxes. But many foreign
companies say they are more interested in the general business climate,
transparency and the rule of law, especially in light of Tokmakjian's
lengthy detention.

The Tokmakjian Group did an estimated $80 million in business annually
with Cuba, mainly selling transportation, mining and construction
equipment. The Ontario-based company was the exclusive Cuba distributor
of Hyundai, among other brands, and a partner in two joint ventures
replacing the motors of Soviet-era transportation equipment.

It was caught up in an investigation of Cuba's international trading
sector, part of a crackdown by President Raul Castro.

Authorities first closed another Canadian trading company, Tri-Star
Caribbean, then the Tokmakjian Group and then the British investment
firm Coral Capital, all in 2011. Top executives were arrested, netting
dozens of Cuban businessmen and officials. Most have been tried and
sentenced for accepting bribes.

The arrests were unprecedented for Cuba, where foreign business people
suspected of corruption were usually deported.

The executives of Tri-Star Caribbean and Coral Capital were tried a year
ago, convicted, sentenced and quickly expelled from the country.

The owner of Tri-Star Caribbean, Sarkis Yacoubian, who first worked for
Tokmakjian and later became his competitor, confessed and fingered his
former employer.

Canadian Ambassador Yves Gagnon has been present for much of the trial.
The defendants may have outside lawyers as consultants in court but must
be represented by public defenders.

(Reporting by Marc Frank; Editing by Daniel Trotta)

Source: Cuba puts Canadian exec on trial; some investors put off |
Reuters -

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