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ALSTOM

France’s Alstom ‘to pay $700m’ in US for bribery

French industrial giant Alstom has agreed to pay $700 million to settle US corruption charges related to the paying of bribes, a person familiar with the matter said Tuesday.

France's Alstom 'to pay $700m' in US for bribery
France's Alstom is to pay $700 million in the US over a series of bribery cases.Photo: AFP

The settlement, to be announced next week, comes as US conglomerate General Electric prepares to complete a deal to buy key Alstom assets.

The US Department of Justice has accused Alstom under the Foreign Corrupt Practices Act (FCPA) of bribing officials in Indonesia to win the $118 million Tarahan energy contract in the early 2000s in Indonesia.

Alstom partnered with Japanese firm Marubeni, which in March pleaded guilty to conspiracy to violate the FCPA and was sentenced to pay an $88 million US criminal fine.

Besides Marubeni, three former Alstom officials have pleaded guilty to FCPA violations in the case, while a fourth awaits trial.

The settlement was hinted at earlier this month by US Assistant Attorney General Leslie Caldwell, who said on December 4 that executives from Marubeni and Alstom "engaged in a multi-year scheme to pay millions of dollars to a high ranking member of the Indonesian Parliament and other officials" in exchange for the Tarahan contract.

"We are actively continuing to investigate and anticipate additional law enforcement actions in the near future," according to a transcript of Caldwell's remarks at an Organization for Economic Cooperation and Development event in Paris to launch a report on bribery.

US officials have said emails show the conspirators hired two "consultants" in the Tarahan scandal, employing a second to bribe Indonesian officials because they were doubtful the first would succeed in winning Tarahan.

Caldwell said the US was working with officials in Switzerland, Britain and the World Bank on Alstom corruption matters.

In July, Britain's Serious Fraud Office said it had launched criminal proceedings against an Alstom unit over alleged corruption in India, Poland and Tunisia.

In February, officials in Brazil indicted 11 people in a case in which Alstom is alleged to have paid $10 million in bribes to obtain contracts with the Sao Paulo metro.

In 2011, a subsidiary of Alstom was fined $42.7 million by Swiss authorities to address bribery charges in Latvia, Tunisia and Malaysia.

The impending Alstom settlement is bigger than a $450 million agreement between the DOJ and Siemens in 2008 to settle FCPA charges the German company bribed officials in several countries.

The settlement would remove a hurdle to GE's deal to buy most of Alstom's energy assets for 12.4 billion euro ($15.5 billion).

The deal is a centerpiece of GE chief executive Jeffrey Immelt to make industrial operations a bigger portion of the conglomerate's earnings stream and to reduce the impact of finance units.

Alstom shareholders are scheduled to vote on December 19 on the GE deal. The deal is expected to close in the middle of 2015.

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GE

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000

The French government announced Tuesday that US industrial conglomerate General Electric will pay €50 million ($57 million) after falling short of its goal of creating 1,000 new jobs in the country.

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000
Alstom employees protest in front of the France's Ministry of Finance in Paris. Photo: AFP

GE had pledged to create the jobs by the end of last year as part of its 2015 purchase of the power and electrical grid businesses of France's Alstom.

But shortly after closing the deal GE unveiled a series of job cuts across Europe as slumping oil and gas prices crimped demand for its heavy-duty turbines and other equipment.

The company had already warned last year that it wouldn't meet the target, though the new CEO Larry Culp confirmed in October that GE would “fulfil its commitments.”

It had promised to pay €50,000 for every job not created over the three-year period.

The French finance ministry said after a meeting with GE officials Tuesday that the firm had created just 25 new jobs overall, meaning it would pay €50 million into an industrial development fund.

“GE underscored the significant of its continual investments in France during the period, and noted that despite the particularly difficult business climate, the group had done its utmost to create jobs,” the company said in a statement.

It pointed to a $330 million investment in offshore wind turbines in France announced last year, which it expects to eventually create 550 new jobs.

But union sources said last month that GE was planning to cut nearly 470 jobs, at its Alstom Power Systems GE Energy Power Conversion units.

Under Culp the company has been trying to get its power operations on more solid financial footing, with plans to cut costs further and reduce debt.

Last week it posted a $574 million profit for the fourth quarter, a welcome turnaround from the $11 billion loss a year earlier. 

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