Court Ruled That EuroGas Chief Suing Slovakia Deceived Shareholders in USA

Talc mining in Gemerska Poloma (photo by TASR)

Bratislava, July 12 (TASR) – EuroGas chief Wolfgang Rauball, who is demanding billions of euros in compensation from Slovakia for withdrawing its licence for talc mining in Gemerska Poloma (Kosice region) via arbitration, was judged by a US court to have deceived shareholders, according to the record of a court case in Houston made available to TASR.

The verdict in the Smith versus McKenzie case in 2004 was that Rauball had to pay over USD 113 million (€102.3 million) in compensation to shareholders.

Rauball confirmed the verdict for TASR, adding that he met the commitments stemming from it by 2007. “It was a verdict of a civilian, not a criminal tribunal. We paid the commitments stemming from the verdict, which was confirmed by the same Houston court in 2007,” said Rauball, who accuses current talc mining licence holder Schmid Industrieholding of corruption. Schmid Industrieholding is mining talc in Gemerska Poloma via its 100-percent subsidiary Eurotalc.

“Plenty of claims made by Rauball haven’t been shown to be true or have been shown to be untrue. Subsidiaries of EuroGas AG are going bankrupt, and the arbitration that should have been concluded by this summer is still pending. Meanwhile, EuroGas postponed its annual general meeting from June 30 to an unspecified date. His [Rauball’s] stories are full of criminals who are responsible for the unsuccessful performance of the EuroGas company. For decades Rauball has brought many shareholders into misery, and a court found him guilty as well. He’s never felt any responsibility, however,” stated Schmid Industrieholding chief Robert Schmid.

Rauball rejected these statements, saying that EuroGas filed a lawsuit against Schmid Industrieholding for industrial espionage at the Federal Court in the United States. “I will no longer comment on accusations against me,” added Rauball.

Meanwhile, despite repeated calls from TASR, Rauball has so far failed to submit any evidence that would back up accusations against Slovak representatives on his website. Rauball claimed that, based on the evidence submitted, the Prosecutor-General’s Office has begun investigating alleged corruption concerning the licence case. “The person around whom the investigation revolves is Central Mining Office (HBU) chair Peter Kukelcik,” said Rauball.

However, neither the press department of the Prosecutor-General’s Office, nor the Special Prosecutor’s Office (USP) has registered any such pending case. “USP has recorded a case concerning the suspicion of indirect corruption, but that was rejected by the police a year ago,” USP spokesperson Jana Tokolyova told TASR.

In a statement sent to the Slovak media, Rauball emphasised that he fully stands behind his claims and perceives as false any information to the effect that no action has been taken concerning the given case or that he’s misleading shareholders with his updates concerning the arbitration against Slovakia. On the contrary, Rauball harbours the conviction that he’s stepping on someone’s toes in Slovakia because Kukelcik was officially designated as a witness on behalf of Slovakia during arbitration proceedings held by the International Centre for Settlement of Investment Disputes in Washington in December 2015.

“They’re afraid that the investigation into corrupt behaviour displayed by the witness might lower the odds of Slovakia succeeding in the arbitration,” said Rauball.

According to TASR’s information, another Slovak witness in the case is likely to be Peter Corej, the former owner of EuroGas daughter company Rozmin, which lost the licence back in 2004. Rauball accused him of corruption in the process of acquiring a licence for a company called Economy Agency RV in 2005.

“Rauball tried to buy me in the past. When he didn’t succeed, he started to blackmail me. When that didn’t work, he started to plot schemes against me, only to see his designs fail once again. I’ve been defending the interests of the Slovak Republic, and somebody like Rauball – by the way, he’s already been convicted by a court of similar criminal activities – won’t stop me. I possess enough material in writing regarding Rauball’s practices and the manner in which he operated in Slovakia,” TASR was told by Corej, who filed a criminal complaint against Rauball back in 2011, but hasn’t seen it addressed to date.

The talc deposit in Gemerska Poloma was discovered accidentally during a search for tin in 1985. The talc from the deposit has high levels of purity, with experts viewing it as one of the most important deposits in the world – representing some 85 million tonnes.

The revocation of the licence prompted Rauball, on behalf of EuroGas, to launch arbitration proceedings against Slovakia at the aforementioned International Centre for Settlement of Investment Disputes (ICSID). As the petitioner in the arbitration, which was launched in 2014, EuroGas is demanding compensation of $3.2 billion (€2.9 billion) from Slovakia for what it calls a marred investment.

EuroGas began indicating its plans to take legal action against Slovakia over the loss of the talc quarry in 2010. At first, it demanded compensation of €500 million in 2011. One year later a company called EuroGas Inc., registered in the USA, also began claiming compensation. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the USA from 1991 had been violated. The Slovak Finance Ministry has denied that any such agreement was broken.