22 December 2014
Serious Fraud Office (SFO) of the UK has filed fresh charges in a London Court against the UK unit of French conglomerate, Alstom. Two former employees of the company are also charges along with the company. The UK unit, Alstom Power Ltd., is charged with paying bribes disguised as consultancy service payment to agents or officials of AB Lietuvos Elektrine, the Lithuanian state-controlled energy company. The contract is for the supply of energy burners for the Lithuanian power plant.
Nicholas Reynolds, 49, and Johannes Venskus, 71, are the two former employees facing charges in this trial.
SFO filed charges after 5 years’ of investigations.
Alstom is in the process of being taken over by US based General Electric Company for 12.35 billion Euros.Expecting a heavy fine and drop in orders led Alstom to consider selling its power turbine units and concentrate on its smaller rail unit.
The US Department of Justice (DOJ) is investigating a separate allegation of bribery in Indonesia. Alstom is in negotiations with DOJ for a $700m settlement of this probe. This would be the single largest payment made to DOJ under the Foreign Corrupt Practices Act (FCPA). According to its negotiations with Alstom, GE was to assume liability for the probe and the $700m pay-out. But DOJ demanded that Alstom and not GE should pay the fine. The penalty the authorities said was justified as Alstom did not self-report the violations to cooperate with the criminal probe.
US Department of Justice (DOJ) said that Alstom had hired consultants to bribe officials in Indonesia, Saudi Arabia, Egypt, Taiwan and the Bahamas amounting to $75 million over a period of 11 years to secure contracts worth $4 billion.
Deputy Attorney-General James Code said at a press conference on Monday that Alstom falsified its books to mask the bribes.
DOJ filed charges against five individuals and a Japanese company, Marubeni Corp, in connection with this case. The parent company pleaded guilty to two counts of criminal charges in Connecticut. Alstom’s Swiss unit also pleaded guilty of violating bribery laws. Alstom’s US power and grid unit each entered into deferred prosecution agreements relating to violation of bribery laws. The DOJ said that from the internal e-mails and other information it obtained it was clear that the employee knew that the bribes were illegal.
Over the past few years, the company has faced many bribery investigations around the world. UK SFO has filed a separate bribery charge against Alstom Network Ltd. This unit is not being taken over by GE.