It is the second French company in as many years to be fined for bribing government officials in Malaysia, after telco firm Alcatel-Lucent paid RM435 million to resolve US criminal and civil probes in December 2010.
The four-year probe centred on payments made by Alstom Network Schweiz AG to middlemen — termed “commercial agents” by the company — in return for securing government contracts to build power stations in 15 countries since the 1990s.
The Financial Times reported today that the Swiss Office of the Attorney-General said it had not found criminal wrongdoing by the French company and a Swiss affiliate, which, “as far as can be ascertained” did not know about the bribes.
“But it accused Alstom of ‘failing to meet the standards for an international group employing over 75,000 people’, sanctioning the group for ‘corporate negligence’,” the international business daily said.
The Washington Post also reported Alstom as saying it was satisfied with the outcome of the case as it concluded “the absence of any system or so called slush funds used for bribery of civil servants.”
“In two out of these three cases, Alstom itself would appear to be a victim of the actions of some of its employees, who would have benefited from kickbacks. In the third one, Alstom was simply a subcontractor of a consortium,” the company said, according to Reuters.
Alstom was awarded a RM2.8 billion contract by Tenaga Nasional earlier this year to provide key power generation equipment to Southeast Asia’s first 1,000-megawatt (MW) supercritical coal-fired power plant Manjung, Malaysia.
It also won turnkey contracts in 1994 and 2000 to build four power plants including the 1,300MW Lumut and the 670MW Kuala Langat plants and deals in 2003 and 2004 to install environmental control systems for the Tanjung Bin and Jimah coal-fired power plants.
Alstom was also appointed by Tenaga to supply two 125MW hydro power turbines, a generator and ancillaries for the 250MW Hulu Terengganu hydro power plant in 2010.
Alstom says it is “the largest original equipment manufacturer in Malaysia” having supplied key equipment for nearly 7.5 gigawatt (GW) of the country’s installed power generation capacity.
The ruling will have significant repercussions for a concurrent criminal investigation by Britain’s Serious Fraud Office. Brazil is also investigating some of the company’s contracts.
The Swiss authority also looked at alleged wrongdoing by Alstom in 12 other countries but did not find compelling evidence.
In July, a former Alcatel employee was charged in the Kuala Lumpur Sessions Court with giving a RM25,000 bribe to a Telekom Malaysia (TM) officer, in a case linked to the French company’s admission last year that it had bribed government officials to win a US$85 million (RM255 million) contract.The Swiss Office of the Attorney General said Tuesday it closed a probe into Alstom SA, and ordered a unit to pay 38.5 million Swiss francs ($42.2 million)
lstom Network Schweiz AG, a unit of the French power engineering and train company, was fined CHF2.5 million for negligence in implementing proper controls to prevent bribery by company officials in Latvia, Tunisia and Malaysia, and it was ordered to pay an additional CHF36 million for profits connected to the negligence. Dow Jones Newswires reported on the story, and there’s more here, here, here and here.
The Swiss attorney general said in a statement that during a broader investigation of Alstom, eventually focused on 15 countries, it found that the company “had implemented a compliance policy that was suitable in principle, but that it had not enforced it with the necessary persistence.”
A summary judgement issued by the attorney general’s office said the group “failed to meet the standards” of an entity employing 75,000 people around the globe. Alstom’s compliance department was understaffed, it said, and “filled with employees with too little experience and/or training in compliance issues.”
That lack of experienced compliance personnel, according to the Swiss attorney general’s office, enabled the corruption to happen without the knowledge of the French parent.
“The investigation showed that consultants engaged by Alstom on the basis of consultancy agreements in the mentioned three countries had forwarded a considerable part of their success fees to foreign decision makers and thereby had influenced the latter in favor of Alstom,” the statement said.
Alstom said in its own statement that the use of consultants for tenders is both legal and customary so long as their relationship “correspond[s] to actual services and [does] not contribute to illicit activities led by these partners.”
The company is not going to appeal the finding, it said. Further, it burnished itself in the wake of the announcement, saying the company did not engage in systemic corruption.
“Alstom notes with satisfaction that, after thorough investigations, the Office of Attorney General has concluded the absence of any system or so called slush funds used for bribery of civil servants to illegally obtain contracts,” it said in the statement.
The company is under investigation for alleged bribery by the U.S. Justice Department, as well as by authorities in several other countries, including the U.K.Read more.
From Washington Post/Bloomberg
BERN, Switzerland — A subsidiary of French engineering company Alstom SA has been ordered to pay 39 million Swiss francs ($42.7 million) in fines and compensation to end a long-running corruption case in Switzerland, prosecutors said Tuesday.
The four-year probe centered on payments made by Alstom Network Schweiz AG to middlemen — termed “commercial agents” by the company — in return for securing government contracts to build power stations in 15 countries since the 1990s.Read more.
From Reuters
By Dominique Vidalon
PARIS, Nov 22 (Reuters) - Swiss authorities have fined French power and engineering group Alstom 38.5 million Swiss francs ($42 million) for corporate negligence, after a global bribery probe.
Alstom said on Tuesday it was fined 2.5 million francs for negligence in three cases involving company officials in Latvia, Malaysia and Tunisia. It must also pay around 36 million francs, corresponding to estimated profit related to the cases.
"In two out of these three cases, Alstom itself would appear to be a victim of the actions of some of its employees, who would have benefited from kickbacks, 'enriching themselves at the expense of the company'," Alstom said.Read more.
From Swissinfo
The Swiss subsidiary of French transport and engineering company Alstom has been found guilty of corporate negligence following a lengthy corruption inquiry.
The Swiss Federal Prosecutor’s Office said on Tuesday Alstom Network Schweiz AG had been fined SFr2.5 million ($2.74 million) and ordered to pay SFr36.4 million in compensation relating to three cases where it had failed to prevent the bribery of foreign officials in Latvia, Tunisia and Malaysia.
The punishment comes after investigations into the company’s actions in 15 countries were reopened in 2008. The investigation concluded that Alstom had failed to enforce a compliance policy with the “necessary persistence”.
“Therefore, acts of bribery in Latvia, Tunisia and Malaysia were not prevented,” the prosecutor’s office said in a statement.
“The investigation showed that consultants engaged by Alstom… had forwarded a considerable part of their success fees to foreign decision makers [in the countries concerned] and thereby had influenced the latter in favour of Alstom.”
The prosecutor’s office said that after “considerable investigative efforts” it had detected some breaches of internal compliance methods, but no additional acts of bribery in the other 12 countries.
It dismissed proceedings against parent company Alstom SA in relation to the Latvian, Tunisian and Malaysian cases after imposing costs of SFr1 million.
In a statement, Alstom said it was satisfied that the Swiss prosecutor’s office had not found evidence “of any system or so-called slush funds used for bribery of civil servants to illegally obtain contracts”.
The company said that in two of the three cases were it was found to be at fault, it was a “victim of the actions of some of its employees”, while in the third, Alstom was “simply a subcontractor of a consortium”.Read more
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