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UK SFO investigators questioned Alstom
executives
April 25, 2014 5:39 pm
UK SFO investigators questioned Alstom
executives
Officials from
the UK ’s Serious Fraud
Office travelled to Paris this month to question
senior executives of Alstom as part of a corruption investigation
into the French conglomerate that is in bid talks with General Electric of the US
The SFO conducted its interviews this
month with the assistance of an investigating magistrate in France
The SFO’s five-year probe – which could
result in criminal charges in the near future – is only one of many worldwide
of Alstom as prosecutors, including those in the US and Brazil, among others,
inquire whether the company bribed officials to secure lucrative contracts in
countries from India to Poland to Indonesia.
Uncertainty
about the outcome of these investigations could weigh on any bid offered by
General Electric or any white knight promoted by the French government.
The biggest
outstanding risk lies with the US Department of Justice, investigating whether
the company breached the Foreign Corrupt Practices Act, which prohibits
payments to any foreign government official in an attempt to win or retain
business. The highest FCPA fine was $800m paid by Siemens in 2008.
The DoJ charged
four current and former Alstom executives in 2013, alleging that they had bribed
Indonesian officials to win power contracts. Two have pleaded
guilty, and a third faces a jury trial in June.
By so-called successor liability laws
in the US
Alstom has said it is co-operating with
the DoJ, and as settlement talks have not started it would be “sheer
speculation” to put a figure on a potential fine.
The uncertainty of the outcome of the
DoJ’s probe “means GE will get Alstom cheap,” one lawyer said. “It’s just such
a huge risk that will have to be factored into the price.”
The SFO’s
investigation is more advanced and may finally be reaching a conclusion just as
the company has become the subject of fevered rumours
of a €10bn bid by GE.
The SFO, probing allegations of
bribery, false accounting and money-laundering, has sent its file to the UK
This indicates the SFO wants to file
criminal charges against the company under the UK
The move comes
three years after an unsuccessful
legal challenge brought
by two UK-based Alstom executives – a third suspect died – effectively froze
the SFO’s probe. The agency subsequently dropped its investigation into the two
executives because of lack of evidence but carried on investigating the
company.
The decision from the executives’
judicial review revealed that the SFO suspects that a UK Alstom unit, Network
UK, was a “cell” used to pay €90m to “companies suspected of having acted as
consultants” to conceal “the payment of bribes to secure the award of state
contracts in power, transport and other markets around the world”.
Indian investigators were alerted by
the SFO in February to separate allegations that the company paid £3m of bribes
to secure a Delhi Metro contract, according to press reports in India
Ultimate
sanctions emanating from the SFO’s investigation could include a fine – corporate criminal penalties in the
UK are typically in
the tens of millions of pounds, although there are plans to make them more
severe – against the company, if it still exists.
Successor liability laws are not as
well developed in the UK
Alstom said it was co-operating with
the SFO investigation and declined to comment further. The SFO declined to
comment.
Additional reporting by Michael
Stothard in Paris
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