11 September 2014
Serious Fraud Office of UK has started investigation into alleged bribes amounting to $8.5 million paid by Alstom to win transport and railway contracts in India, Poland and Tunisia. The bribes were paid from year 2000 to 2006. Fraud Office has been investigating Alstom for the past 5 years. Alstom Network UK is a British subsidiary of French industrial group Alstom.
The investigations are coming out at a time when it had negotiated the sale of its power business for $16.9 billion to US Company General Electric. The deal also gives an opportunity for the French government to hold shares in General Electric.
The British investigations were prompted by Swiss attorney general imposing a fine of $41 million on Alstom in 2011 for failure to stop bribery.
Alstom Network UK struck a deal with certain directors and others with Indo European Ventures Pte Ltd and Global King Technology Ltd in India, The payments were under the guise of consultancy fees. The deal was for Alstom to secure a contract to supply Train Control, Signaling and Telecommunication System to Delhi Metro Rail Corporation (DMRC). Similar deals were made with Sagax Engineering Limited and Kavan BV in Poland, and Construction et Gestion NEVCO in Tunisia.
In India, an Urban Development Ministry official said that when they receive the official communication from UK Serious Fraud Office, they will seek a detailed explanation from DMRC. These are typical of excuses given by authorities when they do not want to investigate a fraud involving influential people. If urban development ministry were interested they should have sent some investigators to UK to follow the investigations rather than wait for the official communication from British authorities who are not under any obligation to reveal their own investigation.
This is a matter that urban development ministry should have investigated even if Serious Fraud Office had not found any wrong doings. Similarly Poland and Tunisia will also drag their feet so that the culpable can get away freely.
Foreign Corrupt Practices Act in the US and the Serious Fraud Office in the UK are doing a great service to the developing countries in bring corrupt cases into limelight. They are stopping the man from giving bribe so that the man taking the bribe will also be stopped.