Harvard University’s endowment arm sold 33,600 acres of forest to Ikea Group, exiting a foray into Romanian timberland.
Harvard Management Co.’s strategy of investing in overseas forestry went awry in Romania, where an agent it hired was convicted of bribery and money laundering in June last year. Prosecutors said the agent arranged with sellers to inflate prices that Harvard-owned Scolopax Srl paid for timberland in exchange for $1 million in cash. He denied committing any crime.
“It highlights the outsize risk of going into these frontier markets,” said Joshua Humphreys, president of the Croatan Institute, a social and environmental research group in Durham, North Carolina.
Paul Andrew, a spokesman for Harvard, declined to comment.
Scolopax put the land up for sale in late 2013, asking for about 383 million lei, which was then equal to about $116 million. A spokesman for Ikea declined to say how much it paid for the land.
The purchase makes Ikea the biggest private forestry owner in Romania and gives it a local source of wood for manufacturing.
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