Romania's largest steel producer, Liberty Galati, has recently been embroiled in a major financial investigation. Following a raid on its factory on November 7th, the country’s Directorate for Investigating Organized Crime and Terrorism (DIICOT) announced its intervention, suspecting the company of years of manipulating carbon dioxide emissions trading, resulting in a massive abnormal flow of funds, with the entire case estimated at approximately US$300 million. The case is still under investigation, but for Liberty Galati, which is already in bankruptcy proceedings, the new allegations undoubtedly increase operational uncertainty.

Investigators indicate that between 2019 and 2022, Liberty Galati reported some emissions trading transactions that did not match its actual production capacity, suspecting that it was using this to transfer funds to related companies. Investigative documents show that company executives allegedly approved the transfer of over $130 million worth of emissions rights to two foreign companies, and subsequently repurchased the same batch of emissions rights at a cost higher than the original price, causing the company to suffer estimated losses of over $150 million.

In addition to emissions trading, prosecutors are also investigating the alleged outflow of approximately $57 million through fictitious service fees. Liberty Steel, the parent company, has not yet commented on this matter.