Aug. 22 (Bloomberg) -- Swiss police raided a unit of Alstom SA, the French company whose power stations generate one-fifth of the world's electricity, in a widening investigation of alleged corruption and contract bribes.

One person, ``strongly'' suspected of abusing duties, has been arrested, Switzerland's attorney general said in a statement. The probe is centered on a former executive of Alstom Prom AG in Baden, west of Zurich, as well as other currently unknown people. Alstom spokesman Patrick Bessy confirmed the raids took place and said a retiree has been questioned.

The probe is not linked to other allegations involving Alstom, the attorney general said. Switzerland has already called on French prosecutors to help investigate whether the Paris-based engineer paid hundreds of millions of dollars in bribes to gain customers in Asia and South America from 1995 to 2003. A bribery scandal at rival Siemens AG spans at least 12 nations and cost the German company $2 billion last year.

``In the past, investors have not reacted too heavily to bribery probes,'' Virginie Vacca, an equity analyst at Standard & Poor's with a ``strong buy'' rating on Alstom, said in a telephone interview. ``If we look at what happened at Siemens they might not be as sensitive as we might expect.''

Alstom advanced 3.9 percent to 67.24 euros in Paris trading as of 2:39 p.m. local time. The stock has declined 8.5 percent this year, valuing the company at 19 billion euros ($28 billion). Siemens has dropped 31 percent in the same period, pushed lower by writedowns on contracts.

Dubious Payments

Alstom has built two-thirds of the world's high-speed trains and supplied subway cars used by commuters in Paris, London, New York and Sao Paulo, Brazil. Its larger rivals in the power-plant market are General Electric Co., based in Fairfield, Connecticut, and Munich-based Siemens. The German company has been battered by allegations since 2006 that its employees used bribes to win contracts.

``Findings to date suggest that other companies belonging to the Alstom Group have made corrupt payments to officials or functionaries via the Alstom Prom AG based in Baden, which in some cases might have led to the awarding of contracts,'' the attorney general said.

Premises in central Switzerland, around Zurich, and in Baden were searched yesterday, including the offices of Alstom AG there. Homes in a number of cantons were also raided. More than 50 officers from the Federal Criminal Police and several French police officers, conducted the search, according to the statement.

Victim

Alstom in May allied itself with French prosecutors aiding in the investigation by formally claiming it was a victim of corruption. French prosecutors opened an investigation in November and judges are looking into three allegations, two covering misuse of company funds and the third covering corrupting public officials outside of France, prosecutors' spokeswoman Isabelle Montagne said on May 6.

Paris prosecutors began their probe after receiving a report from Swiss authorities. Civil-party status in France will enable the company to review the files from both investigations.

To contact the reporter on this story: Christian Baumgaertel in Zurich at cbaumgaertel@bloomberg.net.

Last Updated: August 22, 2008 12:01 EDT