An oil trader who is trying to buy gas assets in the UK from big companies like Shell and Exxon Mobil has found himself in legal trouble. Francesco Mazzagatti, who is behind the company Viaro Energy Ltd., is being sued for allegedly making illegal profits from a business linked to an Iranian petrochemical company. This company, Mehr Petrochemical, was later banned from doing business with the United States due to its connections to the Iranian government. Mazzagatti’s lawsuit is part of a larger investigation into his business dealings and whether he broke international sanctions.
The Allegations Against Mazzagatti
Mazzagatti is accused of secretly profiting from Mehr Petrochemical, which makes plastic resin. The U.S. government claims that Mehr was involved in helping Iran conduct business around international sanctions through a hidden network of companies. This shadow network allowed Iran to continue its business despite the restrictions. The lawsuit filed in London by Alliance Petrochemical Investment (API), a company from Singapore, claims that Mazzagatti used his control over Mehr to profit from its products. Even after the company was placed under U.S. sanctions in 2023, Mazzagatti allegedly continued to profit from it. API says that Mazzagatti was still in charge of the company, even after stepping down from the board in 2020.
API is suing Mazzagatti for $143 million, claiming he misdirected money from Mehr’s sales into his own company based in the UAE. They argue that he did this to avoid scrutiny and hide his ongoing control over Mehr. The company also accuses Mazzagatti of producing fake documents to cover up his actions, including a fake bank statement. The lawsuit claims he continued to make decisions for the company, even though he had stepped down from his formal position. Mazzagatti denies the accusations, saying that he never controlled Mehr and that the lawsuit is part of a personal attack by a former business partner.
Viaro Energy and the UK Gas Deal
Meanwhile, Mazzagatti’s company, Viaro Energy, is in the middle of a major deal to buy gas assets from Shell and Exxon Mobil in the UK. If the deal goes through, Viaro will control about 5% of the UK’s total gas output. This acquisition includes 11 offshore facilities and is considered a crucial move in the UK’s energy security. However, the UK’s North Sea Transition Authority (NSTA) must approve the deal, and they are looking into whether Mazzagatti and his company are fit to hold these assets. Part of this review process includes checking the backgrounds of the people involved to ensure they are not connected to illegal activities, including violating international sanctions.
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The NSTA may take Mazzagatti’s legal troubles into account when deciding whether to approve the deal. Mazzagatti has reportedly been in regular communication with the NSTA and says that he is confident the deal will proceed. However, the lawsuit and the ongoing investigations could raise questions about the legitimacy of his business practices and whether he should be trusted with a major role in the UK’s energy sector.
The Background of Mehr Petrochemical
Mehr Petrochemical, the Iranian company at the center of the lawsuit, was targeted by U.S. sanctions in March 2023. The U.S. Treasury Department claimed that Mehr was a key part of a network that helped the Iranian government bypass sanctions. Mehr’s products, especially high-density polyethylene, were sold through a web of companies that generated billions of dollars for Iran. These sales were carried out in countries like Turkey and Asia, allowing Iran to keep its economy moving despite international restrictions.
The U.S. government’s Office of Foreign Assets Control (OFAC) made it clear that any foreign financial institution that worked with Mehr could face penalties. As a result, companies and individuals connected to Mehr became subject to heightened scrutiny. Mazzagatti’s business dealings with Mehr are now under investigation to see if he violated these sanctions or tried to hide his involvement after they were imposed. Mazzagatti’s legal team insists that he had no intention of keeping control of the company after buying a stake in Mehr, and that he tried to sell his shares to avoid being caught up in the sanctions.
The legal battle over Mazzagatti’s alleged involvement with Mehr is just one part of a larger investigation into his business dealings. He is also facing criminal charges in Italy over corruption, but some of those charges have already been dismissed. Despite the ongoing lawsuits and legal issues, Mazzagatti is moving forward with his plans to expand his business in the UK, which may depend on the outcome of the legal cases surrounding him.
