Swiss ruling has serious impact on SFO investigation of Alstom

This entry was posted on Tuesday, November 22nd, 2011 at 4:47 pm

The Serious Fraud Office (SFO) has been dealt a blow to its investigation of the British arm of French manufacturer, Alstom.

The company has been forced to pay a €31 million fine by Switzerland’s attorney-general for failing to stop some of its employees committing bribery which resulted in them managing large ‘slush funds’ that helped secure contracts in Latvia, Malaysia and Tunisia.

However, despite an international investigation, Alstom was not found guilty of corporate fraud. Instead, the reparations are due to negligence because the company was not aware of consultants using funds illegally to secure those contracts.

The SFO’s own corporate fraud investigation into Alstom has been its largest since it began investigating BAE Systems in 2004. However, the Swiss attorney-general has said that although Alstom did not meet the standards expected of a multi-national corporation, “there is no evidence of a systematic way with regard to criminal acts or of systematically accumulated ‘slush funds’.”

The SFO interviewed three of the UK arm’s top executives last year in connection to allegations of serious fraud, and searched nine addresses for evidence. It seems now, however, that the best the anti-fraud body can hope for is a negotiated settlement with Alstom since the Swiss ruling essentially removes any doubt over whether the company’s management was aware of any serious fraud taking place.

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