Alstom Faces Bribery Investigation During Takeover Negotiations

By MarEx 2014-06-14 20:10:00

Britain's Serious Fraud Office (SFO) is pursuing its investigation of alleged corruption at Alstom as a major transatlantic takeover battle for the French engineering conglomerate reaches a climax, the Financial Times reported on Saturday.

The paper said Britain's Attorney General - the government's chief legal adviser - has given permission for the SFO to prosecute the company and former employees for alleged overseas bribery if considered appropriate.

The paper also said the SFO has notified seven individuals that they are under investigation.

The SFO declined to comment and no comment was immediately available from the Attorney General's office.

The FT said the SFO, which opened its probe into the company over four years ago, has invited the company for discussions which could pre-empt any decision to file charges.

The reported moves come at a sensitive time for Alstom, which is expected soon to receive a joint offer from Germany's Siemens and Japan's Mitsubishi Heavy Industries for its turbine businesses.

That approach would counter an existing $17 billion offer from U.S. conglomerate General Electric for Alstom's power arm.

An Alstom spokeswoman in Paris declined to comment on the specifics of the FT story but said: "Alstom continues to work constructively with the authorities to address any allegations of past misconduct."

Alstom is also co-operating with the U.S. Justice Department over allegations of bribery in Asia.

According to court filings seen by Reuters, the Justice Department has evidence that a former Alstom executive tried to bribe officials to secure power projects in Indonesia, India and China.

Two executives of Alstom's U.S. subsidiary in Connecticut have already pleaded guilty and admitted to paying bribes on behalf of the company in connection with a project on the Indonesian island of Sumatra.

The long-running investigation could result in penalties of several hundred millions of dollars, legal experts say.

Copyright Reuters 2014.