Business Irish

Tuesday 16 July 2019

Two Smurfit Kappa managers arrested in Venezuela

Venezuela President Nicolas Maduro. Photo: Carlos Becerra
Venezuela President Nicolas Maduro. Photo: Carlos Becerra

Ellie Donnelly, Gavin McLoughlin, & Nathan Crooks

Smurfit Kappa today refused to comment on reports that two of its managers have been arrested in Venezuela just days after the country’s leftist government occupied a factory and ordered the Irish company to cut prices.

The move has raised fears that the facility could be nationalised, or Smurfit ordered out of the country.

On Thursday evening the Venezuela State Agency for Defense of Socioeconomic Rights (Sundde) said that it had arrested two Smurfit Kappa managers for allegedly engaging in crimes of speculation, boycott, extraction contraband, destabilising the economy, and corruption.

It is understood that the two arrested are local Venezuelan employees.

No Irish nationals are understood to work at the factory.

Earlier this week Venezuela's government ordered the temporary occupation of a Smurfit Kappa carton production unit in Carabobo state for alleged abuse of a dominant position, the Venezuelan price regulator said in a statement.

 Smurfit Kappa told the market on Thursday that it "entirely refutes" the allegations made against it.

 "The group has operated in Venezuela since 1986 to the highest business and ethical standards," Smurfit Kappa said, adding that the Venezuelan subsidiary of which the factory is part represented less than 1pc of its earnings before interest, tax, depreciation and amortisation in the first half of 2018.

 "Smurfit Kappa will continue to monitor the situation closely," the company said on Thursday.

 A number of trade unions have come out in support of Smurfit Kappa, saying the occupation was "an issue that has created unrest and uncertainty among employees and their families."

They said they wanted to "ratify our upmost support and willingness to continue working and producing with Smurfit Kappa".

Last weekend saw President Maduro announce a new currency in a move that amounted to a 95pc devaluation, alongside a range of other measures.

 Mr Maduro's historic devaluation comes as Venezuela sinks into a severe economic depression and wrestles with hyperinflation that the International Monetary Fund estimates will reach one million per cent by the end of this year.

 (Additional reporting Bloomberg)

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