Caracas Chronicles

Photo: El Estímulo retrieved

This piece is part of the investigation that got Armando.Info blocked. We’ve been following this story closely since four of their journalists had to leave the country. Here’s the article by Roberto Deniz now in English.

The companies supplying the Venezuelan government’s main social (and clientelist) program are in Turkey and the Arabian Peninsula’s coast emirates. Although moving from Mexico to Hong Kong seems epic in geographic terms, the business didn’t change hands: it’s still controlled by Colombian businessmen Alex Nain Saab Morán and Álvaro Pulido Vargas, who have been handling a sizable part of publicly funded food imports since 2016. It’s ‘round the world for a stew.

Just five months ago, on April 6, 2018, a letter from the Group Grand Limited reached the office of Aviation Major General Giuseppe Yoffreda Yorio, chairman of the Venezuelan Corporation of Foreign Commerce (Corpovex). The company asked the State entity responsible for public imports to cede “the financial rights corresponding to contract N° CPVX-CJ-CONT-0086-2017” in favor of Mulberry Proje Yatirim A.S., created in Istanbul, Turkey.

As Armando.Info has revealed in various reports, Group Grand Limited, registered in Hong Kong, is one of the judicial fronts behind which Colombian businessmen Alex Nain Saab Morán and Álvaro Pulido Vargas hide, and it has made the pair of partners virtually omnipresent in one business: supplying the main social program of Nicolás Maduro’s government, the Local Committees of Supply and Production (CLAP). As we’ll see below, Mulberry Proje Yatirim A.S. is another piece of the same scheme.

Initially created by the government to work as production groups to guarantee food supply, the CLAP has been relegated in practice to the intermittent and clientelist distribution of boxes and bags with basic food products imported from various countries. That’s how they’ve become a source of business for a handful of businessmen; for low-income sectors, however, they’re one of the few alternatives to mitigate the chronic shortage of food hitting Venezuela.

Group Grand Limited has made the pair of partners virtually omnipresent in one business: supplying the main social program of Nicolás Maduro’s government.

Group Grand Limited’s letter to Corpovex was signed by Andreína Fuentes Mazzei, in her role as legal representative but, as it turns out, Fuentes Mazzei has also served for years as executive in Caracas’ Global Construction Fund, which is part of a conglomerate of the same name in Colombia, Spain, Ecuador and Malta. Alex Saab and Álvaro Pulido started their career in the Global Construction Fund, still thriving today, as contractors for chavismo after they reached an agreement in 2011 to raise a social housing project in Valles del Tuy, southwest of Caracas.

Fuentes Mazzei’s connection with Group Grand Limited isn’t the only indication that the debt assignment from that Turkish company, Mulberry Proje Yatirim, was an endogamic operation between sister companies. In other words: from Saab-Pulido to Saab-Pulido.

Mulberry Proje Yatirim is represented by Betsy Besirée Mata Pereda, who appears as manager of Salva Foods 2015, a Venezuelan company handling the CLAP Stores that President Maduro promotes since 2017. Salva Foods 2015 belongs to Carlos Rolando Lizcano Manrique, also a Colombian businessman, with business ties to Alex Saab and Álvaro Pulido established through Group Grand Limited itself. So everything stays in the family.

Me with myself

When the “cession of financial rights” in favor of Turkish company Mulberry Proje Yatirim was proposed, Group Grand Limited had two contracts with the government and was, perhaps, the main intermediary for CLAP imports. The letter to Corpovex, for instance, talked about the sale of 11.5 million CLAP boxes for the United Corporation of Productive and Food Services (Cuspal), attached to the Food Ministry.

Long before that, in late 2016, Group Grand Limited received what would be its first contract as food importer: the purchase of ten million combos for $340 million agreed with Táchira’s Governor’s Office, back then under Army Captain José Gregorio Vielma Mora, a member of the United Socialist Party of Venezuela (PSUV). A millionaire business was born, always benefitting the same people and it’s still growing. In the end, Group Grand Limited was also chosen by the Health Ministry to import medicines, this time from India.

A millionaire business was born, always benefitting the same people and it’s still growing.

In both agreements with the Venezuelan government for the supply of CLAP boxes, the representative for Group Grand Limited before the authorities was Andreína Fuentes Mazzei, the same who signed the letter to Corpovex. Alex Saab’s son, Shadi Nain Saab Certain, appeared as the company’s director until February 24, 2017. Also, in the registration documents, the company’s contact address is the same as that of the Global Construction Fund in Caracas. Shadi Saab was replaced by Javier Ernesto Betancourt Valle, a Colombian lawyer, former consul of his country in New York, whose name will come up later in this stew with a company from the United Arab Emirates. Álvaro Pulido Vargas’s son was briefly the representative for Group Grand Limited’s Mexican branch, opened and shut down in 2017.

The Istanbul Connection

Although the company was registered on May 7, 2015, Betsy Mata joined the board of the Turkish Mulberry Proje Yatirim A.S. just a few months ago. The contact phone number on the registration documents in Istanbul is from Caracas. The documents also reveal this company’s connection with a British company called Mulberry Capital Partners Limited. It doesn’t seem casual that the apparent epicenter of the CLAP business was moved to Turkey. In fact, it can seem natural, and not because the Saab last name leads back to ancestors in the Middle East: for the past few months, financial intelligence units in at least four American countries are investigating the flow of money behind the CLAP business after Prosecutor General Luisa Ortega Díaz, recently removed by Maduro and in exile, denounced in August last year that Group Grand Limited was managed by Alex Saab and Álvaro Pulido on behalf of the Venezuelan president himself. “We have investigations on the food bags distributed in Venezuela, the CLAP, a Mexican company, registered in Mexico on behalf of two people. The company’s name is Group Grand Limited, allegedly owned by the President of the Republic, Nicolás Maduro,” said Ortega Díaz.

The message caused a wave and authorities of various countries started moving.

But we also have to account for Nicolás Maduro’s political pragmatism, who in a matter of months has tightened his ties with his Turkish counterpart Recep Tayyip Erdogan, seeking an ally to avoid financial sanctions imposed by the Trump administration last year.

The CLAP boxes themselves reflect the close ties and for months, some of the eleven products in the boxes have Turkish labels.

“We’ve brought a full document detailing all opportunities for investment. It’s the first scenario where Venezuela issues a detailed investment proposal,” said Maduro in July from Istanbul before Turkish businessmen. In October 2017, both presidents installed in Ankara the “second mixed inter-government committee” and since then, Venezuelan officials have been travelling to Turkey. In November last year, it was Finance Minister Simón Zerpa’s turn, and in January this year, Delcy Rodríguez, National Constituent Assembly Speaker and now executive vice-president, along with former Foreign Commerce Minister José Gregorio Vielma Mora, visited the Eurasian nation. Results didn’t take long. On August 31, two presidential decrees officialized the ties between State-owned companies Minerven and Carbozulia and Turkish companies for the creation of two “mixed companies.” Previously, in July, the Venezuelan government confirmed to the news agency Reuters that they’re refining in Turkey the gold extracted from the Orinoco Mining Arc, in the south of the country. That very month, Food Minister Luis Medina Ramírez announced on Twitter that he’d met in Caracas with executives of Yayla, which he called the “Turkish agrofood giant,” with whom he agreed on the “cooperation in the supply of food and support for agricultural production.” The CLAP boxes themselves reflect the close ties and for months, some of the eleven products in the boxes have Turkish labels that end up in Venezuelan homes after the government sells those combos at subsidized prices.

Betsy Mata didn’t reply to a request for comments for this report. However, databases specialized in international trade, such as Panjiva, give clues about the role played by Mulberry Proje Yatirim in the CLAP business. According to those records, the Turkish company is the intermediary for the Venezuelan government in food imports, just like Group Grand Limited was since 2016. The information confirms that Mulberry Proje Yatirim buys merchandise from Rice & Beans or El Sardinero, both well-known Mexican providers which Group Grand Limited also regularly resorted to, in order to purchase shipments that keep sailing from the Veracruz port, like before.

Mexican authorities detected that between 2016 and 2017, only the company El Sardinero issued “tax invoices” on behalf of Group Grand Limited for almost $240 million. “Between April 2016 and August 2017, Group Grand Limited sent international transfers from Hong Kong to five different companies in Mexico,” says the document. The report mentions Asasi Food FZC, a company created in the United Arab Emirates, another CLAP intermediary that has been rising almost a the same time that Group Grand Limited was vanishing from the business and its Mexican branch (the one that originated Prosecutor Ortega Díaz’s complaint in 2017) started the liquidation process.

“Arabia Felix” for some

Asasi Food FZC is also involved in the scheme run by Alex Saab and Álvaro Pulido. Sources say that, just like Group Grand Limited ceded financial rights to Mulberry Proje Yatirim, it also did it in favor of Asasi Food FZC. Although we couldn’t confirm that version, we did find a primary link between the duo of Colombian businessmen and the company in the United Arab Emirates.

The plan to feed the poor in Venezuela, officialized by Maduro in March 2016, ends up benefiting a company nominally registered in one of the world’s wealthiest countries.

The link lies in the financial file for Salva Foods 2015, the Venezuelan company responsible for the CLAP Stores. Those documents detail a failed attempt to sell Salva Foods 2015 to Asasi Food FZC. “Annulment of sale to Asasi Food FZC,” says a handwritten sheet in the book of shareholders and almost lost among the rest of the documents. In that transaction, Asasi Food FZC was represented by Jorge Wuerms, a Panamanian citizen, and Javier Betancourt, the Colombian lawyer who replaced Alex Saab’s son as head of Group Grand Limited. “Asasi Food FZC is a company that seeks to satisfy the basic needs of humanity through agroindustrial development,” the company explains on its website.

Although the sale failed, Asasi Food FZC’s involvement in the CLAP business was recorded in Panjiva, in addition to the financial transactions detected by Mexican authorities. Asasi Food FZC bought food from Mexican industries that it later sold to the Venezuelan government. Some of those providers were El Sardinero, Molinos de Azteca de Chalco and Grupo Brandon; this year, the latter became the main supplier of the powdered milk that arrives to Venezuela in CLAP boxes, even though it’s completely unknown in the Mexican milk industry, and despite the poor nutritional quality shown by some of their products after they were analyzed by the Central University of Venezuela’s Institute of Food Science and Technology by request of Armando.Info.

Sources familiar with the business say that Asasi Food FZC’s financial transactions were made through the bank Noor Capital PSC, also from the United Arab Emirates.

Salva Foods 2015’s file shows another failed sale attempt. The owner, Carlos Lizcano, also tried to sell the company responsible for the CLAP Stores to L&L Inversiones SAS, a Colombian company also owned by Lizcano and which, according to importgenius.com, was a supplier for Abastos Bicentenario in 2015, the same supermarket network that would later be replaced by the CLAP Stores. Additionally, by the end of last year, L&L Inversiones SAS sent merchandise to Salva Foods 2015 itself.

Last May, Carlos Lizcano, who has ignored all requests for comment, ended up transferring Salva Foods 2015’s shareholding majority to another company also represented by him, but registered in Abu Dhabi, one of the seven arab emirates on the Persian Gulf coast, thousands of kilometers from Venezuela. Right before the sale of shares, Salva Foods 2015’s capital rose from two billion bolívares fuertes (currently two million bolívares soberanos, or about $30,000 at the official rate) to 50 billion bolívares fuertes (50 million bolívares soberanos, almost $850,000 at the official rate) which were ultimately shared between Mezedes Holding Ltd, with 65.97%, and Carlos Lizcano, with 34.02%.

Abu Dhabi’s business records confirm that Mezedes Holding Ltd was created on April 2018, just four months after that letter in which Group Grand Limited ceded its financial rights to the company in Turkey. This is evidence, at least, that the plan to feed the poor in Venezuela, officialized by Maduro in March 2016, ends up benefiting a company nominally registered in one of the world’s wealthiest countries.