Het Rotterdamse handelshuis Nidera raakte in 2015 in opspraak vanwege een frauduleuze biodieselhandelaar waardoor 200 miljoen dollar verdampte. Onderzoek van Follow the Money wijst uit dat dit allesbehalve een incident was.
Handelaren van Nidera hielden er een wolfse mentaliteit op na en gingen al veel vaker hun boek te buiten. Ze hadden bovendien weinig te vrezen van de risk afdeling en het bestuur (de bonus van de topman werd uitbetaald op een Zwitserse nummerrekening).
Follow the Money dook diep in Wall Street aan de Maas.

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© Marloes Wardenier - 2016

Nidera: Rotterdam's own rogue trader squad

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Last year, a rogue trader was discovered at Nidera, a Rotterdam-based trading firm. The damage ran into the tens, if not hundreds of millions of euros. After extensive research, Follow the Money discovered that this was not just an isolated incident: It turns out that Nidera has been involved in a range of shady trade practices and has been on the radar of the European Anti-Fraud Office (OLAF) for years. ‘It felt like I’d ended up in a Wild West movie.’

Early 2015. The concrete on the fifth floor of the prestigious Rem Koolhaas building ‘De Rotterdam’ — the new offices of Rotterdam trading firm Nidera — has barely dried, but the foundation has already started to rot. It turns out that Tim Remie, senior biodiesel trader, has been grossly overstepping his limits in his futures trade deals. The damage runs into the tens, even hundreds of millions of euros. Remie is suspected to have raked in 1.2 million euros behind the backs of his employers.

It is a tough pill to swallow for Nidera; especially after they started off the year so well, signing the rental contract for their new location right at the foot of the Erasmus bridge. A year earlier, the Rotterdam trading firm had even been the subject of a successful acquisition by Chinese food processing giant COFCO. Twelve months before that, the Chinese state company had already bought 51 per cent of Nidera stock from the original shareholders. Total price: 1.3 billion dollars.

For Nidera, it is a historical moment: the biggest ever – at the time – Chinese takeover of a Dutch company. It is also, however, an acquisition that receives relatively little attention from the media — especially in comparison to the acquisition of insurance company Reaal by the Chinese Anbang corporation, twelve months later.

Promotion, relegation

At the time of its acquisition, the Nidera agricultural corporation contains about 3,500 employees in 20 countries. It produces and trades approximately 18 billion dollars worth of bulk commodities like grains, oil seeds, and biofuels every year. With its new owners, Nidera CEO Ton van der Laan expects, the company should be able to grow to the size of the other ‘ABCD companies’: Archer Daniels Midland (ADM), Bunge, Cargill, and Dreyfus. ‘Nidera plays at the top of the first division. With the injection of capital, however, we can move up to the premier league. I think we can double our size,’ Van der Laan optimistically stated in De Volkskrant at the time. The prospects seem to echo Van der Laan’s optimism: There is talk of a joint IPO in Hong Kong, with the options packages ready to be picked up by Nidera’s management.

For Nidera, Tim Remie’s behavior is a symptom, rather than an incident

Someone who does not get to share in the festivities, however, is trader Tim Remie. Rather than an options package, he receives a pair of handcuffs. On June 23, Remie is suspected of ‘non-official corruption’ and ‘forgery’. It seems that Remie has unfairly benefited some of his clients; in return, he has received 1.2 million euros between 2013 and may 2015. So far, the authorities have already seized 1 million euros worth of real estate, bank accounts, stock portfolios and cars. It doesn’t end there. The entire COFCO acquisition is nearly jeopardized; Nidera’s management is almost fully replaced.

Nidera dismisses the case as an incident. Research by Follow the Money shows, however, that rogue trader Remie was anything but a lone wolf. It turns out that, rather than being an isolated incident, Tim Remie’s behavior is a symptom of Nidera’s corporate culture. That is to say: Nidera’s is the culture of a trading firm in which traders have been pushing — and, at times, grossly overstepping — the boundaries of trading ethics for years. It is a culture in which risk management, compliance and IT was full of holes. It is no surprise that Nidera’s rogue trader manifested himself in the company’s biofuel department. For years, this department had been marked by shady business deals and traders violating all kinds of ethical codes.

Family business

Founded in 1920, the Rotterdam trading firm has the production and trade of agricultural products — like grains, oil seeds, and soy — as its core business. The company is in the hands of three Jewish families: Drake, Salzer Levi, and Mayer-Wolf. Before the start of the Second World War, these families have spread around the globe. The Mayer-Wolf family, for example, ends up in Argentina. There, they manage to turn Nidera into one of the country’s biggest grain and oleaginous crop producers.

The family shareholders do not only keep tight control over the company stock; they also heavily influence its day to day business. Over the years, a remarkable amount of family and extended family members obtain positions in the corporation. Examples include Miguel Mayer-Wolf, the chief commercial officer; Alejandro Mayer-Wolf, country manager in Spain; Gregory Drake, who runs the Rotterdam office’s cantina, and in-laws such as Henk Ensing and his son Dennis Ensing, the latter of which manages to become junior bio diesel trader.

The Argentinean Martin Mayer-Wolf and Belgium-born Jean Salzer Levi keep a close watch on the family capital from the company Supervisory Board. Robert Drake, a Nidera shareholder living in Wassenaar, is connected to the Nidera headquarters in a different way: he occupies himself with various business opportunities in West Africa and the spreading of his Bob’s Mayonnaise product in his spare time.

While the agricultural branch in Buenos Aires has specialized itself in growing, harvesting, and processing varies grains and oleaginous crops, The 300 employees in Nidera’s Rotterdam office focus on the trade in soy, grains, corn, rice, and other bulk commodities they can use to make a quick profit.

Full speed ahead, catch those “opportunities”; we’ll do the paperwork later. That’s typical Nidera.


Necessarily, this businnes involves quite a bit of opportunism. ‘Nidera is a trading company, so in the end everything revolves around making money. If there’s an opportunity, they always go for it right away,’ one former employee says. For years, they witnessed Nidera’s mercantilism with their own eyes: ‘full speed ahead, catch those “opportunities”; we’ll do the paperwork later. That’s typical Nidera.’

Nidera’s traders look for lucrative businesses all around the globe. One example of such a business is found in Iran, a country that, starting in 2006, has been the subject of increasingly heavy sanctions from the EU and US because of its nuclear weapons program. It turns out that these economic sanctions make Iran a highly interesting sales market — one that most other big trading firms won’t touch, nonetheless. Nidera dares to take the risk. ‘Those Iranians just wanted to eat chicken; but those chickens also need food themselves. As a result, a lot of corn starch, soy, and byproduct went to Iran as chicken feed,’ the former Nidera employee says.

Though profitable, it’s a risky business: ‘There were big bonuses to be made, but you also risked huge blows if a customer wouldn’t take the order. In Iran, there’s no judicial way to force someone to uphold their end of the deal.’ This difficulty became evident in 2011, when the Rosalia D’Amato — an Italian ship leased by Nidera and packed with soy — was hijacked by Somalian pirates on its way to Iran. After about seven months and 600,000 dollars in ransom money, the ship was allowed to go. But: ‘the Iranian client didn’t want to take the delivery anymore. That costs us millions.’

Where the trouble started

In 2006, new “opportunities” are found in the sustainable energy sector. These would eventually come to form a major headache for Nidera, but in 2006, they are just regarded as a big speed trip. An increasing amount of EU countries (including the Netherlands), as well as the US, have been handing out all kinds of subsidies meant to stimulate the use of sustainable energy. Nidera can’t miss out on this new billion-euro business; it immediately sets up a new department that trades in various types of biodiesel, ethanol, biomass, electricity, gas, and CO2 tickets.

The whole thing is initiated by a man who invariably wears suspenders to work: Nidera’s CEO, Ito van Lanschot. He is a member of the famous Van Lanschot banker family and the former European CEO of Reliant, an American energy conglomerate. ‘The department was Van Lanschot’s brainchild; he foresaw a big future for biofuels. Business was booming, and governments were handing out gigantic subsidies for sustainable energy. As a result, there were investments in biomass power plants, ethanol factories and biodiesel plants going on everywhere,’ says Jan Wegman, who was hired by Van Lanschot in January 2007 in order to set up the electricity trade. ‘He wanted to build an entire chain: from the oil fields in Argentina to biodiesel, electricity, gas, and oil.’

Van Lanschot has big plans for energy and biofuel. They go together nicely with Nidera’s dominant position in Argentina’s soy market: soy beans can be turned into biodiesel, after all. Van Lanschot even gets financial support for his brainchild. ‘The banks gave an extra credit, half a billion euros in total, to expand the business. In one talk, Van Lanschot even hinted at building a 1000 megawatt coal-fired power plant in the Netherlands that would also run on biomass,’ Wegman says. He describes Van Lanschot as a ‘charming and enthusiastic man, who could really make people give their all for him.’ His biggest flaw: ‘The sky was his limit — we called him a megalomaniac from time to time.’

In the end, the power plant is never built. Regardless, Van Lanschot manages to hire 25 new people for the energy department. Among them are various biodiesel traders, an ethanol trader, electricity traders, and supporting personnel for cargo handling and risk management.

Van Lanschot's pals

Van Lanschot turns out to be quite the recruiter. As a Nidera CEO, he brings in countless managers from his personal network. Examples include Guido Schlosser – his former colleague at Reliant and Nidera’s new COO – and Martin Dru, the new Chief Risk Officer. Among insiders, the two are called “Van Lanschot’s pals”.

Van Lanschot also looks for extra support in the new biodiesel trade department. He finds Uwe Schröder, a German with broad experience in international trade. Schröder has previously operated out of London and Moscow; his first serious job was at Glencore, one of the largest resource trading firms in the world. Glencore’s founder is Marc Rich, a controversial commodities trader born in Antwerp. At one point, Rich even made the FBI most wanted list on suspicions of bribery, tax evasion and the violation of international sanctions. He has to flee the US in 1983, but is controversially pardoned by President Clinton in 2000. Rich leaves Glencore in the meantime; he sets up a new commodity trading company, titled Marc Rich investments, in 1996. Schröder joins Rich at his new company, but leaves in 2002. Rich subsequently sues Schröder for 400,000 pounds; the exact accusations are never made public.

Golden age

For Schröder, Nidera's 'vibe' is a lot more accommodating. His colleagues see him as a ‘remarkably civilized man,’ and he is famed for his typical German pünktlichkeit. Moreover, he has joined a company with trade books bursting out of their seams; Nidera, at that point, is turning an enormous profit. In 2008, this profit reaches a record size of 270 million dollars (see: page 12 of the annual report), in part thanks to the ever-rising commodity prices. Wegman describes this golden commodity age as follows: ‘Everything you touched in the energy field increased in value by 10 percent in five minutes.’ Schröders’  Biofuels department is also doing extraordinary well: according to a former trader, it adds 12 million euros — about a fifth — to Nidera’s total annual profit in 2009.

One of the men contributing to the profits is Tim Remie. Born in Tilburg (Noord-Brabant), Remie enters the trader’s wonderland at the age of 23. From that point, his signature underneath a futures deal means that bulk tankers leave one port with 10 million liters of biofuel — estimated worth 7 to 8 million euros — and unload at another, somewhere on the other side of the globe. Furthermore, Remie enters the world of absolute top salaries and hundreds of thousands — even millions, if the trader does an exceptional job — of euros in bonuses. It is not unusual for managers to take home six to eight percent of their department’s profits in bonuses. The result is that traders are highly eager to make as many deals as possible. One look in Nidera’s parking lot, and it is clear to Remie where a lot of the bonus money goes: Porches and Maseratis. If Remie could see into Van Lanschot’s Swiss bank account, he’d also find a large part of his boss’s bonus money.

'It’s Peter Stuyvesant’s world. They fly around the globe, make boatloads of money, and end up with a fast car and a trophy wife.'

One former Nidera employee has a fitting description of the trade culture: ‘It’s Peter Stuyvesant’s world. They make big deals at a young age, fly around the globe, make boatloads of money, and end up with a fast car and a trophy wife. And if they get kicked out somewhere, they can always fly to the Middle East and get a job there.’

The bars and restaurants around the old Nidera office on the Willemsplein also share in the profits. Grand café Loos and bar restaurant Prachtig are some of the Nidera traders’ go-to spots. Money is not an issue: ‘You could invoice up to a thousand euros if you brought clients. With a couple of nice bottles of wine, you’d quickly reach that amount,’ one former biofuel trader says.

The Nidera lifestyle

Splash and dash

The new bio-traders receive heaps of praise from Nidera CEO Van Lanschot. ‘We were the “geniuses” during the monthly round-up sessions, but he didn’t know exactly how all that money was being made,’ one Nidera trader from the biofuel department says. ‘That didn’t matter, either; as long as we brought in the dough.’

Under Schröder’s command, the biofuel department’s success is supported mainly by the trade in subsidized American biodiesel. A statute in the US Energy Bill allows for American companies to claim large subsidies on the production and import of biodiesel. What the lawmakers forgot to add, however, is that the produced biodiesel does need to be consumed within the United States. This legal loophole leads to the ‘splash and dash’ trick: the practice of importing biodiesel and adding one percent regular American diesel in order to maximally profit from the exploit. The final product, dubbed B99, is eligible for the subsidy – over a quarter dollar per liter. The biodiesel does not end up in American gas stations, however. Instead, American parties sell the product for highly reduced prices — about 100 to 150 euros per tonne under market value — to European traders. These traders, in turn, sell the biodiesel at market price to European oil companies that are legally obliged to mix biodiesel in their fuel.

Nidera traders see their “opportunity” cut out for them. From Argentina, they ship boatloads of soy-made biodiesel to the United States. ‘Of course, that biodiesel didn’t stay in the States. It went to Europe with a big discount. Nidera made millions from that “flow”,’ one former biofuel trader says.

Of course, that biodiesel didn’t stay in the States. It went to Europe with a big discount. Nidera made millions from that flow

Using the ‘splash and dash’ trick, trading firms flood the European market for biodiesel. At the time, The Guardian estimated that 10 percent of all American biodiesel shipped to Europe — about 1 billion liters — was part of this trick. The European Biodiesel Board (EBB), a Brussels-based industry association, sounds the alarm: European biodiesel producers are being destroyed by the unfair competition. After their complaint, anti-dumping legislation is created so that American biodiesel is heavily taxed upon entering the EU borders.

Canadian detour

The measure signifies a victory for the European biodiesel industry, but it is bad news for Nidera: the firm sees its profitable trade route dry up. The splash and dash game is not over yet, however. Had Nidera exploited a loophole in the US Energy Bill before, the trade firm now takes it a step further, thanks to its Canadian outpost. One former biofuel trader tells Follow the Money about the ingenious detour Nidera discovered:

The company does a lot of business with its trading partner Tuscan Petroleum, a Houston-based blending company owned by controversial oil trader Clyde Meltzer. Meltzer, who has by now been sentenced to five years in prison for another multi-million dollar fraud, registers the bought biodiesel with the US authorities and collects the subsidy. ‘The idea was that the biodiesel would then remain in the US; otherwise, the subsidy would have to be returned. However, the diesel was sold cheaply to Nidera in Canada, where it was mixed with a little bit of Canadian biodiesel in storage tanks Nidera rented in Montreal.’ The crux: the so-called ‘certificate of origin’ now states ‘Canada’, rather than ‘United States’. This means the load is unaffected by the anti-dumping tax. ‘As a result, we could simply continue making money,’ the former trader says. He estimates that in 2009, about 100,000 tonnes — about 100 million liters of biodiesel — entered Europe through this “Canada route”

OLAF fraud investigation

The trains and ships of Nidera Canada enter the crosshairs of OLAF, the European Anti-Fraud Office. This happens after a tip from the European Biodiesel Board in February, 2010. This board suddenly sees shiploads of Canadian biodiesel enter European harbors after the anti-dumping legislation goes into effect. They suspect that Nidera is falsely registering biodiesel from the US as Canadian diesel in order to evade import taxes. OLAF starts investigating Nidera, one anonymized court ruling shows; the European fraud investigators conclude that Nidera has illegally transformed an American batch of biodiesel into Canadian biodiesel.

'They always sold it as a “fiscal dispute” internally, but in reality it was tax fraud, plain and simple'

Based on the information and documentation supplied by the Canadian authorities, it was established that the majority of the biodiesel in question, exported tot the EU (namely the Netherlands), had initially been imported from the US and declared for free circulation in Canada. [from the OLAF report of October 15, 2012 - ed.]

OLAF’s findings were eventually handed over to the Dutch Customs office, which fined Nidera a hefty 25 million euros. Nidera managed to keep the OLAF investigation and the fine under the radar of the financial press. Internally however, it was a different story: ‘They always sold it as a “fiscal dispute” internally, but in reality it was tax fraud, plain and simple,’ one former biofuel trader says.

OLAF's response

* When asked for comment, OLAF spokesperson Silvana Enculescu sent us the following reply:

​"OLAF has carried out four investigations concerning USA biodiesel imported through Canada. Three of the investigations are closed and one is on-going. Given the requirements of investigative and potentially judicial secrecy in such matters, OLAF can make no further comments at this stage. As a general rule, OLAF's final case reports are not made public. This is in order to protect individual rights, confidentiality requirements, as well as possible ensuing investigations. When finalised, final case reports are sent to the authorities competent for possible follow-up."

Lees verder Inklappen

Canadian dollars

The fine would not be the only dent in the prestige of Nidera’s Canadian department. This department was set up in 2008 by Robert McNaughton and Chad Rodwell, two Canadians. It seems they received a carte blanche from Nidera’s headquarters: ‘It was complete lawlessness out there in Canada, really,’ one former trader from Rotterdam says. ‘There were three guys in Canada who made a 300 to 400 million dollar revenue in a year. People from Risk [the Risk Management department - ed.] went there once, were taken out for dinner and came back like “It’s fantastic over there.” But no one knew exactly how and what they where doing.’

'It was complete lawlessness out there in Canada, really'

The duo is hardly loyal, either. After a year, they cash their bonus and leave their Blackberries at the office, never to return. In 2010, it turns out the administration is full of holes. Market values of open contracts have been systematically inflated. From Canada, one former employee tell us he is not surprised: '[Nidera] were ten years behind other trading companies. There was a culture that was completely comfortable with working with and creating value out of political and country risk. They were making money in places no one else touched, like Iran. They also struggled with accounting, risk control and due diligence.'

Free port

Canada is not the only free port for traders; in Rotterdam, the situation is hardly any different. ‘It often felt like I’d ended up in a Wild West movie,’ one former employee of Nidera’s treasury department says. ‘Traders acted like cowboys and were incredibly loudmouthed. They also received a carte blanche from management, arrived at work in Maseratis and Porsches and drank bottles of white wine during their lunches.’

According to this employee, traders looked everywhere for big profit margins. ‘A trader would have ordered grain in Hungary, for example, and then he is supposed to let treasury know that he’ll need a couple hundred thousand Hungarian forints in two weeks — that way, the currency rate can be covered. But they’d expect the forint to be worth less in two weeks, allowing them a bigger profit margin. Those traders should keep their eyes on grain prices, not exchange rates, though. They thought that was treasury bullshit and would get all cocky, like “piss off, I’m the trader here.” That’s how the treasury people were rebuffed.’

Risk containment

Treasury is hardly the only department constantly fighting with the trading floor. As if they were some elementary school teacher, the Risk Management department also needs to continuously check that traders aren’t taking too much risks in futures trading, and that they are maintaining realistic prices (this is vital in calculating the unrealized profits — see below). Insiders jokingly call them ‘risk dogs’. As one story by a trader who was active at Nidera at the time shows however, some form of control is absolutely necessary. He gives us some insight in a trader’s psyche: ‘If a deal goes wrong, the question is whether you tell your manager right away, or to just put the trade in your drawer for a while. If Risk isn’t paying attention, it’s in a dealer’s nature to try and fix the mistake with the next trade.’

Risk management employees are jokingly called ‘risk dogs’ by insiders

And if the deals were really broken beyond all repair, there was always another way out: the so-called ‘Brazilian Hedge’. In other words: catching a plane to some sunny, faraway place and leaving all one’s problems behind. ‘If a trader had made some bad deals, and couldn’t fix it anymore, they suddenly became completely unreachable. In my years at Nidera, I’ve seen this happen more than once,’ one former employee at Risk says. He also mentions that there was often an unfair fight going on between Risk and the traders: ‘there was a high in- and outflow of people at Risk, mostly because of young employees who saw their jobs at Risk as a way into the trade business. As a result, the ones who treated their job that way were less critical, in order to avoid fights with traders. The traders could always come up with a nice explanation to hide something.

Explanation: The valuation of futures

Determining the profit of a trade firm like Nidera is no easy job. This is mostly because the trade in futures. A Nidera trader would, for example, buy 10 thousand tonnes of biodiesel one day, with a fixed price of 800 euros per tonne. This biodiesel will be delivered within three months to a port in the ARA (Amsterdam, Rotterdam, Antwerp) region. However, the market value of the contract fluctuates in the meantime; if the biodiesel price rose to 850 euros after a month, for example, the contract would now be worth roughly 10,000 x 50 euros — in other words, a profit of half a million euros. If the prices plunge to 750 euros a tonne the next week however, it causes a loss of half a million euros.

These fluctuating profits/losses have, at that point, not yet been realized. That only happens on the day the contract is settled — in other words, when the goods are delivered and the money has to be transferred. Up to that point, we speak of unrealized profits — which are thus based on market prices (fair values). It is difficult to determine those values: ‘The biofuels market doesn’t really have something like a gold standard. Determining the fair value is a guessing game, based on a published price in Platts magazine or a similar deal from the week before,’ one Risk employee, tasked with keeping track of Nidera traders’ profit/loss position, says.

How does this work in practice? ‘If I make a futures deal for May 2017, Risk is going to call me from time to time,’ one biofuel trader says. ‘“How’s the market price?” And: “Who is this client, can they pay a year from now?” And at the end of the year, want to know the same for unrealized profits: “tell me, how are we going to bring in those missing 20 million euros?”’

'Tell me, how are we going to bring in those missing 20 million euros?'

The valuations are sensitive to fraud, as it’s highly lucrative for traders to estimate the market value higher than it really is. In the end, this value is what leads to (unrealized) profit. Like everywhere else, bonuses at Nidera are based on the profit in the trader’s book. At an acquisition, it can also come in handy: jacking up the fair values, again, leads to (unrealized) profit, which in turn inflates the selling price.

In rogue trader Remie’s case, the annual report speaks of the writing down of contracts and ‘counterparty losses’. This means that another party has agreed in a futures contract to deliver a ship with biodiesel for a fixed price a year from now. If, a year later, the price is higher than originally agreed upon, the supplier makes a loss while Nidera profits. The problem: the loser can bow out of the contract altogether, meaning that the shipment is never delivered — and the profit never made.

Lees verder Inklappen

Skeletons in the closet

Nidera’s risk policy fails grotesquely. It turns out, for example, that ethanol trader Tom Hills has put various ethanol deals ‘in the drawer’ for a while in 2010. It is an expression we hear come back in various interviews. It means that a trader doesn’t enter a futures deal right away, but puts it away for a while, hoping for better market rates. Wegman: ‘If you buy a product straight from the factory with a future delivery a year from now, you have to enter it into the computer system right away and value it at market rates. In 2010, however, there was a period that market prices went down quite a lot — and you’d make a loss on a deal. So the deal would literally be put in a drawer in the hopes that the markets will go back up before delivery — because then you’re hailed as the trader with the best deals again.’

Wegman, among with another former employee, tells us how his ethanol colleague suddenly disappeared. ‘At one point, he stopped coming to the office, he resigned, and within a week we found a stack of deals in one of his drawers. Nidera lost tens of millions of euros as a result.’ Hills, who now runs a vineyard in France, only tells us by email that the picture we have is ‘wildly incorrect.’ He does not wish to go into details about what happened, though.

Tonnage surplus

It turns out that ethanol was not the only big disappointment. In the golden commodity age, Nidera enthusiastically entered the — increasingly valuable — tonnage trade; the so-called time charters. Led by the Dane Alex Christiansen, who entered the company as head of the Freight department in 2009, Nidera leased a number of bulk transport ships for a long time. This was not only done to accommodate Nidera’s own trade, but also with the prospect of ‘subletting’ the cargo space to other companies. ‘Within no time, we owned 110 ships — bulk ships like Panamax and Supramax. We leased them for one or two years in order to charter them out, and some ships were still on order,’ one former employee says. But after setting price records year after year, the commodities market crashed in 2009. As a result, the demand for — and, thus, price of — tonnage crashed as well: ‘In the glory days, a big ship would cost 80 thousand dollars a day, but after the market imploded I once found the same ship for the price of 6000 dollars a day.’ The result becomes visible in front of the Dutch shore in 2010. In order to save as much money as possible, Nidera’s ships are left to drift about, right outside the 12-mile zone, for months.

Nidera’s ships are left to drift about, right outside the 12-mile zone, for months

Meanwhile, the company is stuck with an expensive contracts for months to come. ‘If you made a deal for 40 thousand dollars a day, and you’re stuck with that deal for a year, it starts to hurt. Nidera suffered a huge loss from that.’ A former Risk employee confirms the story: ‘It turned out not to be commercially viable at all, and we lost tens of millions of euros because of that.’ When asked, Christiansen himself does not wish to comment.

Financial battleground

The mega losses in the ethanol and freight departments turn Nidera’s 2010 annual report a bright red. Nidera’s gross profit margin on total trade drops by a staggering 150 million dollars. The result: a loss of 88 million dollars, compared to a net profit of 50 million dollars the year before.

Due to the huge losses and lacking cash flows, Nidera burns through its bank loan covenants. This, in turn, causes its line of credit — the lifeblood of any trading firm — to dry up. Nidera’s credit suppliers, a consortium of banks that includes Rabobank and ABN Amro and has a total line of credit worth 1.1 billion dollars, are forced to intervene. Nidera ends up in the Special Risk Management department; an independent party is hired to get the company floating again. PricewaterhouseCoopers (PwC) would eventually be the ones to carry out this internal investigation.

The wing suit touches down

Eventually, the line of credit starts flowing again. It is not without repercussions on the trading floor, however. The ethanol, biomass and electricity trades are halted, leaving only the biodiesel trade. There is a big shift on the managerial level: CEO Ito van Lanschot and Chief Risk Officer Martin Dru are forced to leave. The duo would later found the Commodity Services & Solutions company, which develops a risk management and trading system for the commodity business. This company would prove a popular destination for former Nidera employees.  

Van Lanschot is replaced by Ricardo López Mayorga, the CEO of Nidera’s agricultural branch in Argentina. Dru’s successor is more remarkable: Tony Walker is the new Chief Risk Officer. This Englishman immediately became a commodities trader after his mathematics and physics study; he later became an energy trader. On his cv, the name of one highly infamous employer appears: Enron, the American energy corporation. 

Like thousands of his colleagues, Walker was kicked to the curb when Enron got caught up in one of the largest accounting scandals in history

Like thousands of his colleagues, Walker was kicked to the curb when Enron got caught up in one of the largest accounting scandals in history. The former Enron trader, who likes to climb mountains and jump out of airplanes in wing suits in his spare time, soon makes his way up within Nidera's ranks. In 2010, he is invited to enter the executive board as Chief Risk Officer. That way, he becomes responsible for the containing trade risks and keeping his former colleague traders in check. One of them says that this was completely logical: ‘You know what they say, “it takes a thief to catch a thief.” He was the ideal risk manager, because he traded on a high level and could think three steps ahead of the guys he needs to keep an eye on.’

Failing computer system

Under pressure of the results of PwC’s investigations, one of Walker’s first tasks is to reorganize Nidera’s risk management and replace Intras, the dated computer trading system, with a modern alternative. According to the traders whom have spoken to Follow the Money, this is no unnecessary luxury: They all stress the issues plaguing the ancient system — a glorified spreadsheet program with green-on-black letters. ‘It was a highly opaque system that needed lengthy manuals; traders could easily hide bad deals in it,’ one former Risk employee, tasked with overseeing traders’ risk positions, says.

However, risk management remains anything but bulletproof. In 2015, The Wall Street Journal reports that biodiesel trader Remie hid a derivates deal with Polish partner Petrodom back in 2011. The loss: 1 million dollars. Regardless, Remie was allowed to stay.

It’s no surprise that a trader who has crossed the line is allowed to remain at the company. ‘If it turns out that a trader has signed a deal, but hasn’t put the deal in the system, that’s a deadly sin. Normally, you’d kick out a guy like that, but if he brings it a lot of money, he might just get off with a warning,’ a former employee who worked just below the managerial level says. ‘And if the deal turned out to do well, it would go “son, well done, but you crossed the line there. Don’t do it again; here’s your bonus."’

Remie promoted

So Remie, who likes to play golf abroad, was able to keep paying for his hobby. A year later, his boss Schröder is somewhat less lucky. According to sources at The Wall Street Journal, he is forced to resign in 2012 because — among ‘other reasons’ — he failed to mention losses to management. This is confirmed by another former employee, who mentions that Schröder did a ‘Brazilian hedge’, becoming unreachable to his boss, commercial director Mark Kwakkelstein. Schröder's is succeeded by his protegé Remie, who has at that point been promoted to head trader of the biodiesel department. He is to report to Kwakkelstein, who manages all of Nidera’s trading activities. Kwakkelstein fits the stereotypical bill of a trader, coming to work in an Audi R8 one day and a Porsche or Range Rover the next.

Meanwhile, Nidera traders keep pushing — and crossing — the boundaries.

The Poland route

Nidera manages to keep the enormous losses and investigations out of the news, but in early 2011 the trading firm dominates headlines anyway. In Argentina, the company is suspected of modern slavery: employees were forced to work on the corn fields in conditions that resembled a ‘concentration camp’.  Additionally, Nidera is in a 49 million euro dispute with the Argentinean Tax service. In the end, the whole case fizzles out and only leads to a compliance program in ‘Socially Responsible Entrepeneurship’.

Meanwhile, Nidera traders keep pushing — and crossing — the boundaries. In 2012, they find a loophole in the Polish tax law, allowing them to buy Polish biodiesel at highly discounted rates. The reason for this loophole, once again, is failing legislation. Polish companies duly register their bought biodiesel — from the Polish biodiesel factory Bioagra, for example — with the Polish authorities. This way, they achieve their sustainable fuel quota.

The purchase of biodiesel thus forms a necessary expense for these companies. But, instead of mixing the expensive biodiesel with regular diesel and selling the mixture to Polish consumers, they sell the Polish biodiesel (B100) through the back door to biodiesel traders. In turn, these traders sell the diesel to companies in the Netherlands, like Shell and BP — turning a nice profit in the process. In order to adhere to their own mandate, these companies then register the diesel with the Dutch Emissions authority (NEa).

In other words, the same Polish biodiesel is used to achieve two separate sustainable energy quota — those in Poland and in the Netherlands. The upside: everyone profits, as the Polish can cover part of their unavoidable expenses and trade firms can make high profit margins. Really, the only loser is the environment — in Poland, cars only run on biodiesel in theory. In March, the European Biodiesel Board sounded the alarm about the practice, and asked OLAF for yet another investigation. When asked, OLAF confirms that the European Commission’s Directorate General for Energy is investigating the case.

In Poland, Nidera’s traders are the first in line to buy this rapeseed biodiesel

Polish carousel

In Poland, Nidera’s traders are the first in line to buy this ‘rapeseed methyl ester’ (rme) biodiesel. ‘Because the companies in Poland didn’t have to blend the product, they could sell it for market price — or even less than that. Because of this structure, Nidera was able to consistently buy products under the market rates,’ one former Nidera biofuel trader says. He states that Nidera could thus buy Polish biodiesel at a 30 percent discount.

A part of that diesel supply chain goes through Polish intermediary companies with names like Inter Draco and Tesla and no own trading account. ‘You’d buy 20 thousand tonnes of biodiesel for a 30 percent discount, to be delivered in half a year. That way, you’d make an instant 800 thousand euros of profit on the profit/loss report, but it would still need to be settled [to be actually delivered in six months - ed.]. There is quite a risk involved with these small parties, but we made about 3 million euros a year from that Polish rme business. Often, the stuff would enter by train and be sold to end users like Shell and BP at a 20 percent profit the same day.’

‘The stuff would enter by train and be sold to end users like Shell and BP at a 20 percent profit the same day’

Higher management, that is, Marc Kwakkelstein and Tony Walker, seem to at least be aware of the extremely low prices. This is evident from an email in the possession of Follow the Money. One 2014 email, for example, mentions that Polish biodiesel can be bought ‘at favorable conditions’ and that ‘it makes the risk reward look good even with a high probability of a default.’ According to the trader, Nidera trades about 6 thousand tonnes (worth about 6 million euros) of Polish biodiesel every month between 2012 and 2015.

The sales guys

Nidera’s dubious Polish biodiesel trade stands in stark contrast to the flowery language in its Standards for Business Partners document. In there, Nidera claims to strive for a ‘global value chain [that] conducts business with a high degree of integrity and in a socially and environmentally responsible manner.’

These ethical rules were drafted by Ton van der Laan. This former Unilever CEO, who succeeds the Argentinean López Mayorga after his retirement, begins his work in July 2013. He immediately sets up a compliance program, but he has to fight the trade cowboys, too. ‘Van der Laan was not a trader; as a result, the sales boys stil called the shots,’ one former employee states.

One of those ‘sales boys’ is Miguel Mayer-Wolf, member of the shareholder family and Chief Commercial Officer. He visits the Rotterdam head office from Argentina every month. In 2012 and 2013, making as big a profit as possible becomes even more important: the shareholder families want to attract new capital and put a minority share of 49 percent up for sale. There are few buyers for the trading firm, however. That is, until COFCO corporation — China’s biggest grain trading company — enters the stage. It wants to control Nidera because of the firm’s grain production and enriching in Argentina, Brazil and Romania. The idea behind the move is that of COFCO wanting to anticipate the changing Chinese diet: there is an increasing demand for meat and milk in the country, creating a huge need for agri products like grain and soy.

COFCO hires financial advisors from HSBC and partners of law firm Clifford Chance for the acquisition process. Nidera joins the table in the company of ABN Amro’s corporate bankers and lawyers from the NautaDutilh firm.

Who are the Chinese people that bought Nidera?]

According to the Fortune 500 list, the Chinese COFCO corporation is the world’s 121st biggest company. With 30 billion euros in total revenue, this agricultural giant bought a 51 percent majority stake in Nidera in 2014. This happened with the support of Chinese private equity firm Hopu Investment, the International Finance Corp — the World Bank’s commercial branch —, Temasek, and private equity firm Standard Chartered. Nidera’s Jewish owner families have been generously compensated in the trade, though they do still have to transfer 14.5 percent to COFCO this year due to a so-called earn-out clause.

In March, COFCO director Patrick Yu confirmed this option in an interview with Reuters. In the negotiations, it was agreed that 14.5 percent of Nidera’s shares can be transferred ‘at nil consideration’, depending on Nidera’s performance results between 2013 and 2016.

Since Nidera’s performance was quite disappointing in 2014, and Remie’s losses in the biofuel department might spill over into 2015, the shareholders will not get paid for these 14.5 percent. ‘No, there’s no payment for that, it’s part of a revaluation. In the acquisition, performance agreements have been made,’ Nidera spokesperson Bert Ooms says.

In late August, COFCO announced that it will buy the remaining shares from the Jewish families, making the Chinese the only owners of all shares. The sum that was paid in exchange for the remaining shares has not been disclosed.

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Chinese grain giant takeover

The acquisition seems to be going smoothly. ‘Perhaps the most pleasurable part of the deal was the spirit of partnership that quickly originated between the Nidera team and COFCO, as well as their wish to work on becoming a global agribusiness player together,’ Clifford Chance partner David Griston said on advocatie.nl. ‘At first, the families only wanted to sell a minority stake, but COFCO wanted to buy at least 51 percent and were ready to pay a lot of money,’ a former Nidera manager says. In the end, COFCO pays 10 times Nidera’s yearly profit — 1.3 billion dollars — for 51 percent of Nidera stock.

However, it turns out that the due diligence investigation, codenamed Project Swan, was not done properly. Nidera’s results may have been brilliant before its acquisition: in the last annual report from 2014, which covers the period up to September 30, 2014, a net profit is reported of 119 million dollars. After the acquisition however, it turns out that Nidera is an enormous bleeder. In an aside on page 54 of its 2014 annual report, COFCO notes that the Rotterdam company suddenly saw a net loss of almost 54 million dollars on a 4 billion dollar revenue. In short, the 119 million dollar surplus turned into a 54 million dollar loss in the space of just one quarter.

After its acquisition, Nidera turns out to be an enormous bleeder

The reason for the loss is found in late 2014: there are inconsistencies in Nidera’s administration. They lead to an internal investigation, followed by a forensic accounting investigation carried out by PwC. Traders and managers are interrogated. In April 2015, the investigation has finished; Remie is fired. He is said to have broken trade limits, and his contracts are highly overvalued. This all happens shorty after the finalization of Nidera’s acquisition.

It would take until September, 2015, for the rogue trader to make news headlines — thanks to the Wall Street Journal article. The trading firm, which managed to stay out of the financial press’s crosshairs for years, ends up in many financial newspapers. Les Echos, a French publication, describes Remie as ‘Le petit Kerviel hollandais’; a reference to French stock broker Jérôme Kerviel. After secretly obtaining 50 billion euros worth of trading interests, he caused a multi-billion euro loss for his employer, Sociéte Générale, in 2008.


Cat in the bag

In the Dutch case, it turns out that COFCO is the biggest loser. Despite the due diligence investigation, the conglomerate bought a 1.3 billion dollar cat in a bag — one that started bleeding heavily shortly afterwards, no less. ‘I wouldn’t be surprised if all those hidden flaws and million dollar frauds make the Chinese ask for some of their money back,’ one former employee suggests. ‘If you buy a cat in the bag you also return to the store, after all.’ Neither COFCO nor their lawyers at Clifford Chance wish to respond.

Regardless, the losses are significant. In rogue trader Remie’s case, The Wall Street Journal speaks of 200 million dollars in damages; when asked, Nidera does not wish to state the exact loss. COFCO’s annual report only states that Nidera needs to significantly downgrade its valuation of open futures (‘fair value losses’) and take its counterparty losses into account for the biodiesel trade.

Black hole

It will be hard to estimate the exact loss, as it turns out that the biodiesel business is one big blind spot for the shareholders and commercial director Miguel Mayer-Wolf — part of the so-called ‘executive risk team’ – alike. Even in April 2015, months after the acquisition, Mayer-Wolf seems to have no idea how the biodiesel department is doing. At least, that is what it seems like based on an email in the possession of Follow the Money (see below). Mayer-Wolf asks whether the Intras computer system gives a fair view of the trade risks, and warns that their client exposure ‘went up enormously’.

'You still have four outstanding contracts, dude — the counterparts are going to have to pay first'

One former trader is not surprised; Nidera often took (too) large risks. ‘If a trader went over their limit, Risk had to “flag” them. “You still have four outstanding contracts, dude — the counterparts are going to have to pay first.” Look, if you trade with a party like Shell, BP, or Mitsubishi Corporation, you know they will eventually pay their bills. But we trade with everyone — including unknown parties in India and Poland. Nidera tracked those parties’ credit ratings, but we were allowed to trade with category “G” companies (the lowest credit score) anyway. And if a party wouldn’t settle, and wouldn’t answer the phone for weeks, the contract should have been downgraded. This didn’t happen, though — those contracts were simply shoved forward in order to keep the profit margins alive.’

Cleaning up the mess

The black hole on the bio diesel trading floor has grave consequences, as it jeopardizes the planned full integration and IPO. CEO Van der Laan, for example, stated at the end of last year that Nidera will continue operating as an independent entity within COFCO ‘for now’. At the same time, Noble Agri — an agri trading firm from Singapore that was acquired for 51 percent nearly parallel to Nidera — does become a full member of the Chinese family. The move even led to a name change: The company is now called COFCO Agri.

At Nidera’s brand new headquarters however, the mood is one of cleaning up the mess. The ‘Wall Street on the Meuse’ scandal has caused the once-celebrated biofuel department to become defunct. After Remie’s unmasking, a forensic accounting investigation has been started. Once again, Nidera receives a slap on the wrist: They first need to clean out their closet.

A true exodus starts at the Rotterdam headquarters: there is no future left for CEO Ton van der Laan, CFO Martin Inhargue, nor for head of trading Marc Kwakkelstein. Remarkbly, wing suit flyer annex Chief Risk Officer Tony Walker is allowed to stay. Even more remarkable: Ito van Lanschot, the founding father of the whole mess, wins his court case and is assigned a bonus over the years 2009 and 2010 in June. Nidera turns out not to have given the managers their bonuses because the ‘policies and resulting disastrous results’ the plaintiff caused.

Even though the bonuses in 2007 and 2008 have been awarded, Nidera states that those bonuses were not taken up in Van Lanschot’s employment contract. According to the latter, the reason for that is that ‘this was being paid in a way that may not comply to international tax rules’ (i.e. on a Swiss bank account). Van Lanschot, who is currently vice president at the German agro trading firm BayWa, can expect to deposit 2 million dollars plus interest on his Swiss bank account.

The chickens have come to roost


Nidera’s shady bonus policy is typical for the wolf pack mentality so common among the traders, managers and shareholders throughout the trading firm, which strongly resembles a Wall Street investment bank. It says a lot that Remie, the suspect biodiesel trader, could stay under the radar for years, all the while going over trade limits and possibly making side deals to stuff his own pockets. Nidera’s risk management has failed on multiple occasions over the past year; it was simply a matter of time before the next “wolf” would rear its head. Despite the motto ‘full speed ahead, catch those opportunities and we’ll do the paperwork later,' the chickens have now come home to roost.


When asked by Follow the Money, neither Ito van Lanschot nor Uwe Schröder wished to comment on the record. Robbert Jan Boswijk, Tim Remie's lawyer, indicated that he is as of yet unable to provide us with a comment.

This article was originally published in Dutch under the title "Wall Street aan de Maas: De wolven van het Rotterdamse handelshuis Nidera". It was translated into English by Luuk van der Sterren.

Reaction by Nidera spokesperson Bert Ooms

‘In early 2015, a forensic accounting investigation has taken place. On the basis of that, we can conclude that what happened at the biofuel desk was purely a one man action. I can’t say much about the size of the damage at this point, because we have reported the case to the authorities — the case is with the public prosecutor now. Of course, the timing is bad, as it’s no nice news to tell your new owner. We do notice that COFCO is highly supportive; the relationship is still good. In consultation with banks and shareholders, we have carried out a risk analysis; on the basis of that, we’ve entered an improvement trajectory in order to prevent this from happening again. At the same time, we are improving our risk management situation around the world. Based in the risk analysis, we started an improvement program in which we report about our progress to the banks every month.’ 

According to Ooms, the departure of Van der Laan — who is being replaced by Dierk Overheu — fits into the managerial reorganization of which Tim Lodge is the new CFO. The ‘head of trading’ position, previously held by Marc Kwakkelstein, will now be in the hands of former cocoa trader Philippe Huet. There is also the new position of Chief Information Officer; this position is filled by Rogier Jacobs. ‘It’s a new function, and his most important task is to manage all IT and systemic improvements. There will, for example, be a SAP system, which allows us to treat data better.’

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