14ymedio, Havana, Ignacio Varona, 30 September 2014 – Few expected a magnanimous gesture from the Cuban courts toward the Canadian businessman Vahe Cy Tokmakjian. After he was arrested in September 2011, this 74-year-old man was turned into a test case for those thinking of investing in the Island. “If Tokmakjian is judged too harshly, few are going to want to put their money here,” whispered many in charge of businesses at embassies and other market and capital professionals.
The 15-year sentence for the president of the Tokmakjian Group may now seem a gesture of strength on the part of Raul Castro, but the main outcome is the weakening of investor confidence and the withdrawal of capital from the island. The idea has gained strength in diplomatic and business cliques, who placed all their hopes… and their suspicions on the judicial process that started last June.
According to the prosecutor, Tokmakjian was tried for the crimes of bribery, acts to the detriment of economy and contracting activity, fraud, trafficking in hard currency, forgery of bank and business documents, as well as tax evasion. Two other Canadian citizens, managers in the same company,Claudio Franco Vetere and Marco Vinicio Puche, were sentenced to 12 and 8 years in prison, respectively.
The excessive sentences fell not only on the foreign defendants. Fourteen senior officials and Cuban executives were tried in the same process and received sentences of between six and twenty years. Nelson Labrada, former vice minister of Sugar, will spend the next two decades of his life in prison, according to the ruling of the Provincial Court of the Havana.
The main outcome is the weakening of investor confidence and the withdrawal of capital from the island
On learning of the sentences, relatives and defense attorneys let out a cry of horror that had been pent up for three years. The Ontario-based company has denounced “the lack of due process” and the CFO has confessed that the Cuban authorities have demanded some 55 million Canadian dollars from the group to let Tokmakjian walk the streets again.
Freedom has a price for this foreign businessman, although in the case of the Cuban defendants little can be done to lessen their sentences. If it is an act to make an example and stop corruption, as some say, the severity of the punishment was greater for those who don’t hold a passport from the other side of the world.
The sentence has been made public after months of waiting and tons of speculation. Some ventured that with the new Foreign Investment Law, which came into force last June, the Cuban government would “pass the case under the table” to avoid provoking fears among potential entrepreneurs who want to settle in our land.
Others believe that only an exemplary sentence against this group would make the rules clear and avoid future corruption. For those who believe that the accusations against Tokmakjian are substantiated, the law that has fallen upon him with its full weight will deter others from playing tricks with taxes, appealing to patronage and graft, or falsifying accounts.
This second line of opinion, which considers Tokmakjian guilty and deserving of a heavy penalty, ignores that similar actions are taken by figures from the government itself and the family clan that rules the destinies of the nation. “Do as I say, not as I do,” the generals and lieutenant colonels turned career businessmen seem to say. Not holding military rank is a dangerous condition for businesses on this island.
“Do as I say, not as I do,” the generals and lieutenant colonels turned career businessmen seem to say
Almost a quarter of a century’s presence in Cuba was useless to the Tokmakjian Group in making the prosecutor lenient. Their business group calculated some 100 million dollars of the company’s assets have been confiscated during the judicial process. On top of that, the prosecutor is about to demand some 91 million as compensation for the economic damages allegedly inflicted on the national economy.
Only the Canadian nickel company Sherritt International was ahead of the Tokmakjian Group with regards to commercial operations in Cuba. Specializing in construction and mining equipment, this latter does business worth up to 80 million a year and brings in many of the Hyundai cars that are still circulating in our streets. The niche market they took advantage of included replacement parts and engines for old transport vehicles imported from the Soviet Union.
One could say that Tokmakjian fished in the troubled waters of the lack of business rights for Cubans. He made his fortune when we couldn’t, although that’s not a crime but rather an ethical omission that allowed him to profit where nationals are banned. However, one day he upset someone, and the courts undertook to remind him who rules in this house.
Now, with their offices in Havana closed and sealed, the Tokmakjian Group is claiming in Canadian courts about 200 million dollars from the Cuban government. The case promises to be an interminable sequence of chapters where complaints, negotiations and gestures of clemency or arrogance play out. However, what happens there is beyond the fate of the 17 defendants who have just suffered firsthand the lack of autonomy of the Cuban courts and the regrettable absence of separation of powers.
The harsh sentences against Tokmakjian and the others who were tried is a direct signal to those who believe that they can make easy money in Cuba with the approval of the authorities. The reality is a world of snares: some are activated immediately and others take twenty years to close on the victim.
