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German raid on EADS joint venture

German police have raided the offices of a joint venture between EADS and ThyssenKrupp during an investigation of overseas corruption.

The joint venture -- Atlas Elektronik -- and Rheinmetall Defence Electronics are suspected of paying bribes in Greece in connection with the sale of submarine equipment, the state prosecutor’ office in Bremen said Saturday.

Police raided offices of Atlas and Rheinmetall. They were looking for evidence concerning alleged bribes of $24 million, as well as tax avoidance, a spokesperson from the prosecutor’ office said.

Rheinmetall has denied any involvement in the alleged graft.

EADS and ThyssenKrupp bought Atlas Elektronik from BAE Systems in 2005 for €145 million.

In late 2012, German police raided and searched the German offices of EADS during an investigation into the defense contractor's sale of military aircraft to Austria.

In the U.K., the Serious Fraud Office completed a preliminary probe last year into claims of illegal payments linked to GPT, a subsidiary of EADS. GPT won a £2 billion communications contract in Saudi Arabia to upgrade the royal guard's communications systems.

Netherlands-based EADS -- the European Aeronautic Defence and Space Company -- is Europe's biggest aerospace and defense firm.

In the Atlas Elektronik case, ThyssenKrupp said it discovered the alleged corruption ‘as part of a compliance investigation’ and self reported it to authorities in 2010, a Reuters report said.


Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.