Top Romanian media owner and former CEO of Central European Media Enterprises Adrian Sarbu retained under tax evasion, money laundering-related charges

One of Romania’s most powerful media owners, Adrian Sarbu, best known for his several years at the helm of listed international company Central European Media Enterprises, was retained for 24 hours on Monday under charges of abetting tax evasion, money laundering and embezzlement. The charges are related to a major tax evasion case involving the Romanian company he owns, Mediafax Group. Sarbu rejects the charges, claiming the case was fabricated against him by prime minister Victor Ponta and Ponta’s crony Sebastian Ghita, an influential and controversial politician and businessman.

Sarbu’s case is the latest in a tsunami of criminal investigations, arrests and sentences against the political, administration and business elite in the post-communist country, as countless have been targeted for corruption, fraud or even organized crime by prosecutors for the past several years.

And as the war on corruption intensifies, so are the allegations made by some in the troubled elite that the prosecutors’ moves are made at the orders of key political and business players with the support of the country’s reputed secret services, especially the Romanian Intelligence Service (SRI), the reformed heir of the Ceausescu-era political police, the Securitate.

The decision to retain Sarbu comes after several people were retained late last year in a major tax evasion and money laundering case related to Sarbu’s media grup, Mediafax. Prosecutors argued at the time that Mediafax – which owns a news agency, a business newspaper, several high profile websites and some magazines – was using third companies for accumulate debt in unpaid taxes, then discarding said firms only to establish new ones for the same purpose. The total prejudice claimed by prosecutors amounted to some 17 million lei.

The Mediafax arrests came as 2014 was a nightmarish one for Adrian Sarbu. In the first half of the year, a series of arrests had been made under tax evasion and money laundering charges at companies related to the TV and cinema production and distribution related businesses he set up around Bucharest when he used to run Romania’s leading broadcasting company, Pro TV. His publishing group, Mediafax, was raided by tax authorities, accounts were blocked and later the same year Mediafax entered insolvency procedures. Sarbu and PM Victor Ponta were involved in several public clashes, fueling rumors on the market that Ponta’s crony, politician-businessman Sebastian Ghita, who also owns a TV news channel, was eyeing Sarbu’s media properties and forcing a takeover.

• For about 20 years, Adrian Sarbu has been Romania’s most influential media owner. Called by some as „The Shogun”, he developed an allure of a man who can decide who wins or loses elections, who becomes a public personality or remains in the shadows.
• In 1995, he launched Pro TV, a commercial broadcaster who became market leader instantly – and has remained so ever since. He also established the first major independent news agency, Mediafax, in the 90’s. He expanded both broadcasting and agency/publishing businesses rapidly, and Pro TV soon became a pillar of the Central European Media Enterprises (CME), a Bermuda-based listed company which owns leading TV stations in six CEE markets, most notably Romania and the Czech Republic.
• Adrian Sarbu became the CEO of CME in 2009 – the first Romanian to take such a position at an international listed company. Following reported clashes with CME’s key shareholder Time Warner, he announced his resignation as CEO abruptly in summer 2013, effectively leaving the company a year ago. He remained the owner of his local publishing operation, Mediafax Group.

On his leaving the Prosecutor General’s Office on Monday evening, Adrian Sarbu boasted his handcuffs and claimed all accusations against him were a ridiculous fabrication.

And in a separate statement published by his news agency Mediafax he claimed the case against him and Mediafax was aimed at destroying the media institutions he had built over the past 25 years. He claimed that:

• the case was fabricated at the orders of „Pontaghita and their camarilla” – referring to PM Ponta and Sebastian Ghita
• the case was aimed at destroying Mediafax news agency, Gandul.info news website, Ziarul Financiar business newspaper – „media institutions which I have built for the past 25 years and which I have kept politically independent”.
• the case was following a script executed by prosecutors, tax inspectors, criminal police with strong support from the intelligence service, the SRI.
• the case was built on groundless accusations against people who are blackmailed that they either denounce him as the key abetter of tax evasion and money laundering or remain under house arrest.
• fragments from the case are sent to the „Pontaghita” propaganda outlets to force the decision of judges
• this is a case of state terrorism against media institutions pushed into liquidation or sale to political interest groups, under the mask of a move against tax evasion and money laundering.
• he strongly believes in the state of law and freedom of the press and his key priority now is to keep the Mediafax company active.

He alleges that Romania’s judiciary – which has been praised internationally for its moves against high profile corruption and economic crime for the past several years – acts at political orders with support from the intelligence services.

Adrian Sarbu thus joins other high profile personalities who, once targeted by prosecutors, accuse political interference with the judicial system.

• So did Dan Voiculescu, a heavyweight businessman and media mogul who last summer received a prison sentence in a major corruption scandal. And so did last week a top opposition leader, Elena Udrea, who, once placed under criminal investigation, alleged in an interview with HotNews.ro that politicians and intelligence services were working together to influence justice – though she failed to produce any evidence to support her claims so far. And she described a shadowy world where a few mingling people – including top SRI officials, magistrates, media owners, businessmen and politicians like Victor Ponta or Sebastian Ghita, and herself – were making and breaking everything of note in Romanian political decision making, justice, and business. Again, she did not provide evidence to support her claims.

The Romanian judiciary has been hailed at international level for several years due to the wave of measures to fight high level crime and corruption. The latest European Commission report on the evolution of justice reform in Romania applauded key judiciary bodies again in late January 2015. But it once again criticized the Government, the Parliament and various public figures and interested media for their public criticism of magistrates and justice bodies, for dodging proper legislative procedures (as is the case of the many emergency ordinances that the government has issued instead of pushing for laws) or for blocking criminal procedures against public officials.