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« The Corporate Investigations List (April 2015) | Main | The BOTA Foundation explained (Part One): Why focus on BOTA? »
Monday
Apr062015

Bombardier investigated for ‘secret’ South Africa payment

The public corruption watchdog in South Africa is investigating a secret $5 million payment by a Canadian company to a middleman who describes himself as an "influential individual in political circles."

The investigation of transportation giant Bombardier involves a $3 billion rail contract the company won in 2006, CBC News said last week.

South Africa middleman Peter-Paul Ngwenya claims he helped Bombardier win the contract. But he denied paying bribes for company.

"There's something totally disproportionate about that kind of payment," Paul Hoffman, a lawyer with the independent Institute for Accountability in Southern Africa, told CBC News.

Bombardier was part of a five-company consortium that built the Gautrain project. It's a 50-mile line linking Johannesburg and Pretoria with South Africa's biggest airport. The project was finished in 2012.

South Africa's Public Protector, Thuli Madonsela, is investigating the project. She won Transparency International's Integrity Award in 2014.

"There were allegations of political interference," Madonsela told CBC News. "However, whenever there are allegations of political interference, we look at whether there was any alleged or suspected gratification, what you would call bribery in your country."

Bombardier said it will help in the investigation if it's asked.

CBC News said it has seen secret documents Bombardier drafted and signed in 2010 for a $5 million payment to Peter-Paul Ngwenya after he threatened to go public with information that "might harm  [Bombardier's] reputation."

He claims Bombardier still owes him more than $6 million for his help winning the Gautrain project.

"[Bombarier is] a company of cheats," Ngwenya told CBC News. "That's the only way I can describe it. It's a company that's run by hooligans, by crooks, people who won't honour their written word."

Ngwenya denied paying any bribes on behalf of Bombardier.

The company said it doesn't owe him any money.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.