August 24, 2011 / 6:41 PM / in 6 years

Cuba probes dealings of Canadian trading firm

HAVANA (Reuters) - Cuban authorities are investigating the business dealings of Canadian firm Tri-Star Caribbean, one of the best known trading companies on the island, foreign business and diplomatic sources said this week.

The cause of the investigation was not clear, but it appeared to be the latest looking into kickbacks involving Cuban imports, sources said.

Company President Sarkis Yacoubian was picked up in mid-July for questioning, they said, and since then as many as 50 to 60 people, mainly company sales personnel, state purchasers and functionaries, have been questioned and in some cases imprisoned.

Cuban President Raul Castro has made fighting corruption a top priority since taking over for his ailing brother Fidel in 2008, and in the past year a number of Cuban officials and foreign businessmen have been charged in graft cases.

Tri-Star Caribbean does business with a broad assortment of ministries and state-run businesses -- from tourism, transportation and construction to the nickel and oil industries, communications and public health.

The company has one of the largest foreign trading offices in Havana and has sold hundreds of millions of dollars worth of transportation, construction and other equipment and machinery to the communist-run country since 1996.

Yacoubian, an Armenian-born Canadian citizen, has always gotten a tip of the hat from other foreign traders for his deftness at navigating the turbulent and murky waters of Cuba’s export-import businesses.


“Due to the U.S. embargo and our close links to the United States most companies are loathe to do business directly with Cuba,” said a Canadian businessman who asked not to be named.

“So the Cubans turn to the trading companies which do the purchasing and delivery for a high margin and inevitably run into Cuba’s security apparatus which is tasked in part with circumventing U.S. sanctions,” he said.

Tri-Star has gained a high profile in Cuba by involving itself in civic causes and throwing lavish year-end parties for prominent local and foreign businessmen.

Now those same circles are rife with rumors about who has been questioned, what might be behind the investigation and Yacoubian’s whereabouts and possible fate.

An employee at Tri-Star’s headquarters in Novia Scotia said he was not there and his brother Greg, reached at a Toronto phone number, told Reuters: “I can’t make any comment right now.”

A Western diplomat said the investigation was unusual because it is being carried out by state security services, not the Attorney General’s Office.

President Castro, a general who headed Cuba’s Defense Ministry for 49 years, has cracked down on corruption as part of his efforts to revive the country’s sagging economy.

He has moved military officers into key political positions, ministries and export-import businesses and in 2009 established the Comptroller General’s Office with a seat on the Council of State.

A source close to the case said the Comptroller General’s Office has been brought into the case, “meaning big fish might be caught up in the net.”

The crackdown has resulted in the breaking up of high-level organized graft in the civil aviation, cigar and nickel industries, at least two ministries and one provincial government. An investigation into the communications sector is currently under way.

Two Chileans, former Fidel Castro friend Max Marambia and his brother Marcel, were recently given long sentences in absentia for convictions on corrupt business charges. They will not serve them unless they return to Cuba.

Editing by Jeff Franks and Cynthia Osterman

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