U.K. SFO Said to Explore Charging People in Alstom ProbeSuzi Ring
U.K. prosecutors are exploring whether to charge individuals as part of their bribery investigation into French train-maker Alstom SA, three people with knowledge of the matter said.
The Serious Fraud Office sent confidential letters in recent weeks asking the individuals to come in to discuss what possible charges they may face and their pleas, according to the people, who asked not to be identified. At least five people have been contacted, one of them said.
The individuals weren’t given any indication what charges are being considered, and in a second letter, sent in the last two weeks, the SFO said it will wait to hold the discussions while their prosecutors confer with Alstom about their findings, the people said. Often such talks determine what charges are brought against someone in exchange for pleading guilty.
Alstom, which also makes equipment for power plants, has faced corruption investigations in several countries since auditors for the Swiss Federal Banking Commission unearthed documents showing possible corrupt payments in 2004. Probes are underway in the U.S. and Brazil, as well as the U.K. In Switzerland, the company ultimately was fined 38.9 million Swiss francs ($43.4 million) in 2011 by the Swiss Attorney General’s office over bribes paid in Latvia, Malaysia and Tunisia.
Alstom may face bribery charges in the U.K. probe, Bloomberg News reported in February, citing people familiar with the case. The people with knowledge of the SFO letters said they weren’t aware whether any of the individuals contacted are still with the company.
“Alstom continues to work constructively with the authorities to address any allegations of past misconduct,” Claire Biau, a spokeswoman at Levallois-Perret, France-based company, said in an e-mail. “In the meantime, the company is committed to assuring that it conducts its worldwide business fully in compliance with all laws and regulations.”
Jina Roe, an SFO spokeswoman, declined to comment on the investigation.
Alstom has become the object of an international bidding war since April when General Electric Co.’s interest in buying its energy business was reported. Munich-based Siemens AG is working on a counteroffer together with Japan’s Mitsubishi Heavy Industries Ltd. Both Siemens and Fairfield, Connecticut-based GE have been trying to get the backing of the French government, which is seeking to extract the best guarantees for jobs and France’s energy independence.
The SFO began investigating Alstom in 2009 after being contacted by the Swiss Attorney General’s office, and arrested three members of the company’s U.K. board in 2010 on allegations of bribery, money laundering and false accounting. The case against them was dropped.
The Alstom investigation is one of several long-running probes current SFO Director David Green inherited that have suffered setbacks. A bribery case against British businessman Victor Dahdaleh collapsed halfway through trial in December, more than two years after he was charged, making a win with Alstom more important, said Matthew Bruce, a London-based lawyer at Freshfields Bruckhaus Deringer LLP.
“The agency is under increasing pressure,” said Bruce, who is not involved in the Alstom case. “The real proof of changing its fortunes as a prosecutor will obviously be getting these kinds of cases over the line.”
The SFO said in the letters about the plea talks that it got authorization from the attorney general to pursue charges in the Alstom case this year, according to two of the people. The agency said in 2011 it suspected the company gave money to firms acting as “bogus consultants” to bribe overseas officials for contracts from 2004 to 2010, according to court papers then. Alstom denied the claims and said in a January 2011 statement that it doesn’t tolerate corruption.
In the U.S., the Justice Department is building a case against Alstom that has the potential to result in one of the country’s largest anti-corruption enforcement actions, Bloomberg News said in March, citing two people with knowledge of the probe.
Alstom is cooperating with U.S. investigators and it’s too early to estimate how large any possible penalty could be, according to a March statement by Robert Luskin, a lawyer for the company at Patton Boggs LLP, about the story. Biau declined to comment on the status of the U.S. case.
Four former Alstom executives have been charged by the U.S. since 2012. Ex-sales employees Frederic Pierucci and David Rothschild have pleaded guilty and William Pomponi is set to go on trial this year, according to the Justice Department.
Lawrence Hoskins, a former senior vice president responsible for Asia in the company’s Connecticut unit, was arrested last month after being charged in July, according to the DOJ. He pleaded not guilty and a trial is set for 2015.