THE USED CLOTHES TROPHY (part 2)

Berlingske Tidende,(from TvindAlert) August 24th 2002
By Michael Bjerre

 

In 1997 Tvind directed over 25,000 tons of used clothing through E.C. Trading and the Jersey Companies. With an average load of 17 tons this equals 1,500 trucks stuffed with used clothing heading from Western to Eastern Europe.

Other key figures reveal how gigantic the business with Eastern Europe for the Teacher’s Group becomes.

The E.C. Trading turnover rises strikingly in the mid-90’s.Up from 17.2 million Dutch Guilders [about 60 million Danish Crowns] in 1995 to 35.5 million Guilders [about 130 million Danish Crowns] in 1998. Tvind’s moneymaking machine ran smoothly. But the Hungarian police had a watchful eye on the transports with used clothing from the west.

The Hungarian customs officers noticed that the Tvind-trucks were showing false customs forms. There was far more clothing loaded on the trucks than accounted for in the customs forms.

Thus in the fall of 1999 the Hungarian customs police asked their Dutch colleagues to start an investigation on E.C. Trading.
In the Amsterdam offices of E.C Trading the employees were shocked as two police officers showed up to ask about the false customs forms, but the police left empty-handed. Now Tvind panics, as the police leaving empty-handed is no clue toward Tvind not being an active offender in the Hungarian matters, as a former employee states.

This former employee wishes not to reveal his identity as he has been involved in issuing the false customs forms for E.C. Trading.

“We sent out two different sets of customs forms. One of them showed the real amount, while the other showed a far smaller amount of the loaded clothes. In some cases, it only showed 10 percent of what was actually loaded on the truck”, the former employee states.

As Tvind sources tell, action was taken by Tvind members after the police had showed up at the Amsterdam offices to destroy all proofs for irregularities.

The sources interpretation is as follows:

On the same evening as the police had visited the offices one of the Tvind leaders went hastily through all the files with the customs forms at the E.C Trading office to make sure, that nothing can be traced back to the company. Afterwards one piece of paper after another disappears in the shredder.

Tvind also had gotten very active in Hungary. Some time before, Flemming Gustafsson had travelled to Hungary to set up a Tvind office for one of the Jersey companies, as the sale of used clothing is booming.

Now everything is done to find a way our of the country as fast as he can. Immediately a container is ordered in order to clear away the office within 24 hours. Furniture and computers are packed removed, and as the police appear at the office the only thing left is Flemming Gustafsson’s leased Mercedes.

The Dutch police are looking for Flemming Gustafsson, too. But he seems to have been swallowed by the ground.
According to the information available to Sunday Berlingske Flemming Gustafsson had fled to Kenya’s capital Nairobi, where he still has an address even while working in Holland again. Sunday Berlingske would have liked to hear Flemming Gustafsson’s own interpretation of the proceedings, but the request was being turned down as he didn’t wish to talk to the newspaper.

The police in Holland have not found any proofs for the customs forms fraud, and some months later, on May 23rd, 2000, E.C. Trading files bankruptcy.

So quietly the company tries to disappear from sight, explaining they were not able to get their feet back on the ground after the collapse of the trade with used clothes in Eastern Europe.

The appointed trustee, The Hague lawyer J.C. Rosenberg Polak, quickly realizes that this is not an ordinary bankruptcy. “Actually, I haven’t seen something like this before”, J.C. Rosenberg Polak states, who is specialized in bankruptcies.

At first, the lawyer thinks it is just a regular liquidation. But after receiving the hint that a sect like Danish school movement of the ‘70 owns the bankrupt company and all of their trade partners – UFF, Humana and the Jersey companies – he begins to wonder.

This model is great for everyone who wants to drain a company to channel away the assets.

While trying to reveal the trade relations between the companies, J.C. Rosenberg Polak finds a very suspicious pattern.The debtors of E.C. Trading are the four Jersey companies and a fifth, registered in Ireland, Brichwood Trading.

At the same time, the annual statement of accounts shows that the five companies shortly before E.C. Trading’s bankruptcy had paid out a stock profit of 2 million dollars to their common holding company, Coriander Holding Ltd.

“The question is whether this is a coincident or the dividend had been paid consciously at the expense of the – practically – bankrupt company”, the suspicious receiver writes in a report on this matter, dated September 11th, 2000.

Therefore J.C. Rosenberg Polak asks for information about Coriander Holding, which Tvind also is behind at and is, according to Sunday Berlingske information, controlled by Mogens Amdi Peterson.

Even though J.C. Rosenberg Polak asks the Tvind director of the Jersey companies, Birgitte Larsen at Gibraltar, for information regarding the holding company again and again, he receives no answer. On other occasions, the receiver is being lied to.

“At first they denied that the bankrupt company was part of the Tvind companies. In a later phase among others the board of directors of some companies based on the Channel Islands [i.e. Jersey, ed.] confirmed the companies being part of the Tvind group. All seems to show that the bankrupt company [E.C. Trading, ed.] is part of the Tvind group”, J.C. Rosenberg Polak writes in the receiver’s report of this year May 7th.

The Matter is not finished yet. But after J.C. Rosenberg Polak threatened some of the Jersey companies with filing a lawsuit in Jersey, the Tvind people obviously got nervous and paid part of their debts to E.C. Trading.

“It seems they fear a lawsuit filed in Jersey. Because then it would become obvious in court, who is behind Coriander Holding”, J.C. Rosenberg Polak says.

Today, the receiver does not hold much for Tvind.

J. C. Rosenberg Polak: “I find it hard to see what their way of doing business has to do with humanitarian work. If they wanted to do good for the people in the Third World, they shouldn’t be selling their used clothes to their own companies, skimming off the biggest profit.”

The lawyer also shakes his head on the idea that Tvind set up a different company after E.C. Trading’s bankruptcy, Conmore, to keep up the fraud.

“This is always the problem with bankruptcies, the people can just continue with a different company”, J.C. Rosenberg Polak closes his statement.

ISOBRO is a union of 39 humanitarian organizations in Denmark. Members are among others the Fokekirkens Nødhjælp [People’s Church Emergency Aid], BØRNEfonden [the Children’s Fund] and UNICEF. ISOBRO reacts strongly on the revelation of Tvind’s economic laundering of used clothing.

ISOBRO’s main target is developing a high ethic standard for collections and donations. The union has therefore drawn up common ethic rules for this area.

“First of all, it is fantastic, Tvind holding some of the poorest humans on this world hostage in this kind of speculation” ISOBRO’s Chairman Stig Fog says.

“Secondly, the Danish authorities will have to become more conscious of their responsibility. It is insane that they free UFF/Humana from their duty to pay VAT, even though they seem not to stand on the proper side of the law.”

This week’s Friday, Coop Danmark A/S – the former FDB, operating among others SuperBrugsen, Kvickly and Fakta – announced Tvind would no longer be allowed to have their collection bins in front of their shops.

This was decided on as Tvind is operating so closed, it doesn’t fit Coop Danmark’s ideals of openness and dialogue. Stig Fog thinks the local authorities should follow this example.

“It would be peculiar if the Danish local authorities would continue to supply space for UFF’s collection bins after all the information becomes public”, Stig Fog declares.

The question of legality of Tvind’s economic arrangements has to be answered by others. For the time being, Tax and Customs authorities investigate, closely cooperating with the Bagmandspolitiet [backer’s police], if UFF/Humana has drained sales tax or turnover tax-free funds from Denmark illegally. Upon reading the information collected by Sunday Berlingske the public prosecutor Henning Thiesen declares:
“What in this context is happening in Holland and other countries will of course be included in our consideration.”