(IPS) – The Peruvian Congress has opened proceedings to demand that U.S. businessman William Kallop pay the Treasury 482.2 million dollars — taxes on the 900-million-dollar sale of a petroleum company and other debts to the government.
PetroTech Peruana (PTP) was sold Feb. 6, 2009, to Ecopetrol, the Colombian state oil company, and the South Korean National Oil Corporation (KNOC) in a transaction conducted in the United States.
With the U.S. Offshore International Group serving as intermediary, the sale was made outside of Peru in order to evade taxes, concluded a special commission of the unicameral Congress, presided by Jhony Peralta, which investigated PTP’s activities since its founding by Kallop in 1993.
“The Peruvian government could nullify the sale of PTP to Ecopetrol and KNOC because they violated the laws that require the payment of taxes,” Peralta told IPS. He noted that conducting the sale abroad does not exempt it from taxes associated with the change in ownership of a Peruvian company.
Peralta, member of the governing Peruvian Aprista Party, said the investigation found evidence that Kallop’s ruse in the sale was a habitual practice while he was at the helm of PTP.
At the time the company changed hands, PTP held a concession to drill for oil on 9.5 million hectares. It produced 12,000 barrels of crude daily, and had reported annual revenues of 360 million dollars, with 134 million dollars in profits for the 2008 tax year.
Kallop now has offices in the Houston, Texas, returning to the United States from Peru in 2008. He had moved to Peru in the early 1990s, at the start of the Alberto Fujimori government (1990-2000), which threw open the nation’s doors to speculative foreign investment.
Shortly after it was incorporated, PTP obtained a concession for numerous offshore oil wells within Peruvian territorial waters. Its main oilfields are in the region of Piura, along the country’s north coast, known to be rich in hydrocarbons.
Peralta said that PTP was set up from the beginning to maximise profits and reduce tax and royalties payments to the government as much as possible. To that end, Kallop designed a structure made up of several companies, managed by frontmen, that provided services to PTP.
Using that formula, PTP was able to declare lower profits to the tax authorities. The company over-invoiced the formally subcontracted services from other companies, which were actually also owned by Kallop. “That is how the tax evasion took place,” said Peralta, who is the Piura region’s representative.
The full Congress approved the investigative commission’s report and conclusions on May 20, with 75 votes in favour, 16 against, and one abstention.
The file was sent immediately to the public prosecutor for corruption cases in order to draw up criminal charges against Kallop and other PTP executives. Charges are also pending against five former ministers and 20 former officials of the Fujimori and Alejandro Toledo (2001-2006) governments for failure to audit the petroleum company.
Jorge Pérez Taiman, Kallop’s attorney in Peru, told IPS that the report approved by Congress is plagued with inaccuracies and that his client’s tax debt is much lower than stated.
“The PTP sale was made abroad, and for that reason it is exempt from taxes,” Pérez insisted. He noted that Peru’s economy minister and tax chief at the time of the sale had told the commission “that the transaction was not subject to taxes, therefore the debt of 270 million dollars does not exist.”
The attorney also denied that the state-run oil company Petroperú is attempting to recover a debt of 66.7 million dollars from PTP. Pérez said that Petroperú — which works in fuel refinery, transport and distribution — had agreed to arbitration in the claim and had lost.
He acknowledged that a PTP debt of 120 million dollars to the Peruvian government is currently in litigation. “If we lose that case, it will be paid. If we don’t lose, we won’t pay. It’s that simple.”
As for the eight companies that were allegedly used as a front for the oil company’s profits and to limit its tax and royalty payments, Pérez said it is not a crime to own several companies simultaneously.
Kallop left Peru in October 2008, shortly before the release of telephone conversation recordings, intercepted illegally, between executives of another state-run oil company, Perúpetro, allegedly in collusion to grant an oil drilling concession to Discover Petroleum, a Norwegian company.
Perúpetro is in charge of promoting investment in fossil fuel exploration and exploitation in Peru.
The spying was conducted by the private company Business Track (BTR), which listed PTP among its clients. The release of the recordings forced the resignation of the chief minister at the time, Jorge del Castillo.
Perúpetro’s president, Daniel Saba, who managed to weather the scandal storm, has indicated he suspects that Kallop paid BTR in an attempt to oust him, in retaliation for his forcing PTP to pay off a 40-million-dollar debt.
Peralta, meanwhile, said there signs of connections between PTP and BTR, and he wouldn’t rule out Kallop wanting to spy on Perúpetro. The businessman’s behaviour “follows a pattern that the legal authorities should investigate and penalise,” said the lawmaker.
All parties in Congress were included in the investigative commission, which recommended charging Kallop with tax fraud and bribery.