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Alcoa Agrees to Settle Aluminium Bahrain Racketeering Suit

Oct. 9 (Bloomberg) -- Alcoa Inc., the largest U.S. aluminum producer, agreed to settle a racketeering lawsuit brought by Aluminium Bahrain BSC, which claimed it overcharged for materials after bribing senior company officials and the government in Bahrain.

The settlement has a total value to Aluminium Bahrain, also known as Alba, of $447 million and will consist of cash and a long-term alumina sales agreement, the company said in a statement today. The settlement, which included no admission of liability, resulted in the release of all claims against Alcoa and related defendants, Alba said. Alcoa said in a separate statement that it agreed to pay Alba $85 million in cash in two installments.

“The new leadership of Alcoa is to be commended for this fair and transparent settlement, which marks a turning point for Alba in its legal efforts to recover losses suffered over a long period of time,” Mahmood al-Kooheji, Alba’s chairman, said in the statement.

Alba filed a civil suit in February 2008 against New York-based Alcoa over claims that Bahrain’s state-owned aluminum producer paid almost $500 million more than it should have for alumina following the alleged bribes. Alcoa had asked a judge to dismiss the case, filed in Pittsburgh, arguing that the alleged conduct took place outside the U.S. Alumina is the principal material in aluminum.

Dahdaleh Charges

Canadian businessman Victor Dahdaleh didn’t participate in today’s settlement and remains a defendant, according to the Alba statement. He faces criminal bribery charges in the U.K. and his trial is scheduled to begin in London in April, the statement shows. Alba’s civil case against Dahdaleh in the U.S. is also being litigated in Pittsburgh, the statement shows.

Alcoa said in its statement the settlement with Alba represents the best possible outcome and avoids the time and expense of complex litigation.

The U.S. Department of Justice and Securities and Exchange Commission have been investigating the allegations since 2008 to determine whether Alcoa or anyone else violated the U.S. Foreign Corrupt Practices Act.

Bahrain Mumtalakat Holding Co. BSC, the investment arm of Bahrain’s government, owns 69.4 percent of Alba, data compiled by Bloomberg show.

To contact the reporter on this story: Ayesha Daya in Dubai at

To contact the editor responsible for this story: Stephen Voss at

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