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FCPA Blog Daily News

« Daimler Deal Reported | Main | Daimler Charged For Bribery [Updated] »
Wednesday
Mar242010

Code Named Ruthenium

The U.K.'s Serious Fraud Office today reported in dramatic fashion the arrest of three top executives of French industrial giant Alstom's British unit. They're suspected of paying bribes overseas to win contracts.

After today's arrests, the company said:

Several Alstom offices in the United Kingdom have been raided on Wednesday 24 March by police officers and some of its local managers are being questioned. The police apparently executed search warrants upon the request of the Swiss Federal justice. Alstom has been investigated by the Swiss justice for more than 3 years on the motive of alleged bribery issues. Within this frame, Alstom’s offices in Switzerland and France have already been searched in the past years. Alstom is cooperating with the British authorities.

In August 2008, we reported that Swiss police had arrested a former Alstom manager and searched for evidence as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, as were homes in several cantons.

Another international investigation of Alstrom involving suspected corrupt payments in Asia and South America between 1995 and 2003 has been ongoing. Reports in May 2008 said Swiss authorities found evidence Alstom paid around €20 million via shell companies to agents and others in Singapore, Indonesia, Venezuela and Brazil. Reports also mentioned payments of $6.8 million in connection with a $45 million contract for the Sao Paolo subway and a Brazilian energy plant.

The press said in June 2008 that French judges had charged a former Alstom consultant for his role in suspected overseas bribes. The company apparently appeared as a civil plaintiff in that case, claiming it may have been a victim of embezzlement.

Paris-based Alstom is a global leader in equipment and services for power generation and high-speed rail transport. It operates in more than 70 countries with about 80,000 employees. Revenues last year were €18.7 billion. It has an office in Windsor, Connecticut and its securities trade in the pink sheets (Other OTC: AOMFF.PK).

Here's the full text of the today's SFO release:

Three members of the Board of Alstom in the U.K. have been arrested on suspicion of bribery and corruption, conspiracy to pay bribes, money laundering and false accounting, and have been taken to police stations to be interviewed by the Serious Fraud Office.

Earlier this morning search warrants were executed at Alstom business premises and residential addresses at locations in Warwickshire, Leicestershire, Cheshire, Shropshire, Derbyshire, Staffordshire and London. This operation has involved 109 SFO staff and 44 police officers and Accredited Financial Investigators from Warwickshire, Leicestershire, Cheshire, West Mercia and Staffordshire Police Forces and the Metropolitan Police Service. The three men arrested during this operation are aged 52, 51 and 44.

Code-named Operation Ruthenium, the investigation by the SFO is into the suspected payment of bribes by companies within the Alstom group in the U.K. It is suspected that bribes have been paid in order to win contracts overseas, and that this has involved associated money laundering and other offences. The SFO has been working closely with the Office of the Attorney General and Federal Police in Switzerland and a number of Police Forces in the U.K.

Commenting on today's action, SFO Director Richard Alderman said, "The SFO is committed to tackling corruption. We are working closely with other criminal justice organisations across the world and are taking steps to encourage companies to report any suspicions of corruption, either within their own business or by other companies or individuals."

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