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Harvard's 33,600-acre plot of forest in Romania has been sold to the Swedish furniture manufacturer Ikea, the company confirmed.
The move distances Harvard from a corruption case involving one of the contractors who helped oversee the land, and comes shortly after a change in leadership at Harvard Management Company, which invests the University’s $35.9 billion endowment.
Operating through a subsidiary, HMC put the property up for sale after a former contractor, Dragos Lipan Secu, was arrested on bribery and money laundering charges in January 2014. Romanian authorities alleged that Secu committed the crimes while purchasing timberland on behalf of Harvard between 2007 and 2009.
The subsidiary, Scolopax, asked 383 million Romanian lei, or the equivalent of $116 million for the forest. It sold to Greengold European Capital SA and then to Ikea Group. A popular furniture retailer, Ikea’s new acquisition will give the company a local, renewable wood supply for furniture production, according to a press release dated July 16.
“Through this acquisition Romania becomes the first country where the IKEA Group will manage its own forest operations and we aim to set an example for sustainable forest management,” Frederik de Jong, Chairman of IKEA Resource Independence Investments SRL, said in a statement.
Harvard spokesperson Paul Andrew declined to comment.
HMC began purchasing timberland in 1997. It invested heavily in timber under the guidance of then-President and CEO Jane L. Mendillo, who resigned in 2014 after a tumultuous six-year stint as the head manager of Harvard’s endowment. Her replacement, Stephen Blyth, comes from a background in public markets and faces high expectations to bring Harvard back to its pre-recession dominance in investment returns.
Secu was found guilty of colluding with timber sellers to buy timberland on behalf of Scolopax for artificially high prices. According to a statement issued by the Romanian Anti-Corruption Department last year, he received bribes including 4.45 million lei, or $1.3 million, a trip to the Canary Islands in 2007, and a Chrysler Sebring car. He denied committing the crimes.
—Staff writer Mariel A. Klein can be reached at email@example.com. Follow her on Twitter @mariel_klein.
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