A UK subsidiary of Alstom – the French industrial champion that accepted €12.35bn for its energy business from General Electric last month – has been charged with corruption by the Serious Fraud Office.
The UK’s main anti-corruption body said in a brief statement on Thursday that it was charging Alstom Network UK with three counts of corruption and three counts of conspiracy to corrupt relating to “large transport projects” in Tunisia, Poland and India. The first hearing in the case will take place in a London magistrates' court on September 9.
The charges are the culmination of a probe that has lasted more than four years, and which was temporarily halted when two former suspects challenged the SFO.
In that judicial review against the SFO, the court heard that the SFO was building a case around Alstom Network UK, which the agency alleged was used as a “cell” to siphon bribes to the company’s agents around the world. The company has countered that while it used the unit to pay its agents, those payments were legitimate and it was a way of centralising and controlling them, people familiar with the situation previously told the Financial Times.
The SFO’s investigation is just one of several around the world that the company is facing, the most pressing of which is by the US Department of Justice, where two individuals have already pleaded guilty.
Indian investigators were alerted by the SFO in February to separate allegations over whether the company paid £3m of bribes to secure a Delhi Metro contract, according to press reports in India.
The fact that the SFO’s charges related to the UK transport business means that GE – which is only buying Alstom’s energy business – would not be liable for any eventual fine if the company is found guilty.
The DoJ, meanwhile, has concentrated on investigating whether Paris headquartered Alstom or its executives had bribed officials in Indonesia to win power contracts.
The UK overhauled its criminal penalties for companies earlier this year, moving more in line with the US, which has fined companies hundreds of millions of dollars for infractions of its Foreign Corrupt Practices Act. Under the new guidelines, corrupt companies can be fined as much as 400 per cent of their alleged illicit profits.
Still, any UK fine levied on the company if it is found guilty of the SFO’s charges would be small by comparison to the US, even under the new penalty regime.
The SFO’s investigation into individuals is still continuing. It interviewed former Alstom employees in Paris in April and last month warned a number of individuals they might face charges.
While some of the individuals held senior management positions at the company, none were board members of Alstom. This is important because in order to prosecute the company under the UK’s old bribery laws, the SFO must be able to show that a “directing mind” at the company ordered any corrupt payments. That is normally limited to board members, chief executives or “superiors” who “speak and act as the company”, according to prosecutors’ guidelines.
The SFO said that it was still considering charges against individuals and declined to comment further.
Alstom said it was aware the SFO had initiated proceedings against Alstom Network UK and said it was “in ongoing communications with the SFO about its investigation and will continue to work with the SFO to seek a fair and appropriate resolution.”
It did not indicate whether it would contest the charges or plead guilty.