A lawsuit in Spain has turned up documents indicating that Holcim may have invested in a Cuban cement plant despite warnings the deal might violate U.S. law because it sits on land seized from U.S. citizens, reports the Miami Herald. The deal took place in 2000 – when Holcim operated under the name Holderbank – but ownership was put under a string of companies in Spain, the Netherlands and Panama to put distance between Holcim and the investment, according to documents filed in the lawsuit. 

“Holderbank’s investment in the Cienfuegos property clearly would constitute ‘trafficking’ in confiscated property under Title IV of Helms-Burton,” wrote the Arnold & Porter law firm, who was hired to advise Zurich-based Holcim, in a fax to the company in 2000. 

Holcim claims it has no investments in Cuba. “Holcim does not own a business or a stake in a business in Cuba,” company spokesman Eike Christian Meuter told the Miami Herald.

The lawsuit involves Spanish firms Firebrick SA and Acedos Trading who allege that Inversiones Ibersuizas owes them more than $2 million from the investment in Cuba. Acedos and Ibersuizas joined forces for an attempt to enter the home-construction market in Cuba. However when the attempt failed, Ibersuizas then proposed to Holcim that they establish a joint partnership with Cuba to run the Carlos Marx cement plant in Cienfuegos, according to court documents. Holcim was to provide capital, technical expertise and management.

A July 11, 2000, letter to Ibersuizas signed by Marcos Portal, then Cuba’s minister of basic industries, reportedly said Havana had accepted “the offer presented by Ibersuizas-Holderbank to establish a joint venture in the Carlos Marx plant.” 

Ibersuizas created a Spanish firm, Las Pailas de Cemento, in 2000 that paid $70 million to Cuba for 50 percent of the joint venture, Cementos Cienfuegos plant. Holderbank controlled the project through a Panama-based company, Windward Overseas, and a sophisticated “put option” mechanism, according to court documents. The deal began to break down in 2004, when Ibersuizas President Luis Chicharro complained in a letter to Holcim that the investment was in trouble because the Swiss company “had assumed control of all the business” and was making bad decisions.

“Ibersuizas is convinced that when we brought you into this project our return had two elements, the payment in cash and the put,” Chicharro wrote in the letter, which is part of the court documents. “The put is losing practically all its value.” 

The letter added that the problems “could be counterproductive for Holcim” – an apparent reference to a European Union law designed to shield European companies from Helms-Burton. Switzerland is not part of the EU. “The protection a Spanish company offers to the investment … is losing its nature and in case of problems it will be very difficult for European and Spanish authorities to protect [it] … from American authorities,” wrote Chicharro.

Just a few months later, the Washington, D.C.-based Zuckerman Spaeder law firm wrote to Ibersuizas stating it was aware of “the structure of Holcim’s concealed ownership interest in Las Pailas” and raising the possibility of a monetary settlement with the Claflin family.

William H. Claflin IV, a Boston investment advisor involved in the family claims over the Cuba land, said that a U.S. law firm told him in 2004 that it had a client who could broker a settlement with Holcim for a share of the settlement amount. The family still has a claim of $11 million on the Cuba land, recognized in 1969 by the U.S. Foreign Claims Settlement Commission.

Ibersuizas replied to Zuckerman Spaeder that it was not interested in a deal, but within months it began moving the shares in Las Pailas through other companies in Spain and the Netherlands, according to the court documents. In 2005, it was reported to have sold the shares for about $65 million to Apollo 200, identified in court documents as a Spanish firm controlled by Chicharro and three other Ibersuizas officials.

 

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