French firm fined RM133m for bribery in Malaysia

By Shannon Teoh

KUALA LUMPUR, Nov 23 — French engineering group Alstom was fined RM133 million by Swiss authorities after its employees were found to have bribed civil servants in at least three cases including the award of contracts in Malaysia.
It is the second French company in as many years to be fined for bribing government officials in Malaysia, after telco firm Alcatel-Lucent paid RM435 million to resolve US criminal and civil probes in December 2010.
The four-year probe centred on payments made by Alstom Network Schweiz AG to middlemen — termed “commercial agents” by the company — in return for securing government contracts to build power stations in 15 countries since the 1990s.

The Financial Times reported today that the Swiss Office of the Attorney-General said it had not found criminal wrongdoing by the French company and a Swiss affiliate, which, “as far as can be ascertained” did not know about the bribes.
“But it accused Alstom of ‘failing to meet the standards for an international group employing over 75,000 people’, sanctioning the group for ‘corporate negligence’,” the international business daily said.
The Washington Post also reported Alstom as saying it was satisfied with the outcome of the case as it concluded “the absence of any system or so called slush funds used for bribery of civil servants.”
But the US daily also reported the French firm as acknowledging “that prosecutors had concluded that ‘improper payments were made to civil servants in Latvia, Malaysia and Tunisia.’”
“In two out of these three cases, Alstom itself would appear to be a victim of the actions of some of its employees, who would have benefited from kickbacks. In the third one, Alstom was simply a subcontractor of a consortium,” the company said, according to Reuters.
Alstom was awarded a RM2.8 billion contract by Tenaga Nasional earlier this year to provide key power generation equipment to Southeast Asia’s first 1,000-megawatt (MW) supercritical coal-fired power plant Manjung, Malaysia.
It also won turnkey contracts in 1994 and 2000 to build four power plants including the 1,300MW Lumut and the 670MW Kuala Langat plants and deals in 2003 and 2004 to install environmental control systems for the Tanjung Bin and Jimah coal-fired power plants.
Alstom was also appointed by Tenaga to supply two 125MW hydro power turbines, a generator and ancillaries for the 250MW Hulu Terengganu hydro power plant in 2010.
Alstom says it is “the largest original equipment manufacturer in Malaysia” having supplied key equipment for nearly 7.5 gigawatt (GW) of the country’s installed power generation capacity.
The ruling will have significant repercussions for a concurrent criminal investigation by Britain’s Serious Fraud Office. Brazil is also investigating some of the company’s contracts.
The Swiss authority also looked at alleged wrongdoing by Alstom in 12 other countries but did not find compelling evidence.
In July, a former Alcatel employee was charged in the Kuala Lumpur Sessions Court with giving a RM25,000 bribe to a Telekom Malaysia (TM) officer, in a case linked to the French company’s admission last year that it had bribed government officials to win a US$85 million (RM255 million) contract.