Owner of Romanian low cost airline Blue Air arrested for 29 days

Romanian businessman Nelu Iordache, the owner of Blue Air low cost airline and of construction company Romstrade was arrested for 29 days on Sunday (December 2 ) in a case involving an alleged EU fund embezzlement.

He is being accused for embezzling some EUR 5.5 million from the EU funds used to build the Nadlac – Arad highway, for money laundry and faking documents. The court decision can be appealed. Nelu Iordache, nicknamed the King of Asphalt, is one of Romania’s richest, ranking 28th in the Forbes rich list, with an estimated wealth of some EUR 150 million.

Iordache’s lawyers claim the funds in question were taken in June 2011, and the request to reimburse EU funding by the European Commission was only made in October 2011. Political commentators suggest there could also be some political ties to it.

Iordache, who had first been arrested for 24 hours, was questioned for around six hours during the night Thursday to Friday (November 29 to 30).

The Romanian company had partnered several Portuguese firms for work on the highway segment, but as some work conflicts arose, the Portuguese companies reported their Romanian partner to several institutions, including the European Commission. The damage in this case could be of some EUR 6 million, according to the unnamed sources. The association Romstrade-Monteadriano Engenharia e Construcao-Donep Construct won the EUR 115 million bid for the highway segment, and financing came from EU funding.

The Romanian Highways Company (CNADNR) recently canceled the contract for the first segment of the Nadlac – Arad highway, which Romstrade had won, citing a delay in work as the main reason for canceling. The project is only 20 percent finalized, not 70 percent as it should have been, according to CNADNR. Other ‘complex’, yet unnamed reasons were also cited as reasons for cancellation. Work on the segment started last year in fall, and was supposed to end in 2013.

The Prime Minister Victor Ponta said earlier this month that the bid for this highway segment was deemed as performed in incorrect conditions by the European Union, so it was possible to cancel it.

Romanian company Romstrade ended 2011 with a profit of EUR 2.6 million, which was much lower than the EUR 31 million in 2009.

Adapted from Romania-insider