Three UK board members of the French rail infrastructure group Alstom were arrested by the Serious Fraud Office (SFO) yesterday on suspicion of bribery and corruption, conspiracy to bribe, money-laundering and false accounting.
An operation involving 109 SFO staff and 44 police officers culminated in dawn raids on five business premises and four residential addresses in Warwickshire, Leicestershire, Cheshire, Shropshire, Derbyshire, Staffordshire and London.
The three men arrested in "Operation Ruthenium" are being interviewed at police stations around the country. They are aged 52, 51 and 44 and on the boards of Alstom UK Holdings Limited, Alstom Limited and Alstom Network UK Limited.
The SFO investigation of Alstom in the UK followed allegations of corruption by the Swiss authorities in the late 1990s. In 2008, the company admitted that French and Swiss investigators were looking into alleged vast bribes used to lubricate contract wins in Asia and South America between 1995 and 2003.
"The SFO is committed to tackling corruption," Richard Alderman, the SFO director general, said. "We are working closely with other criminal justice organisations across the world and are taking steps to encourage companies to report any suspicions of corruption, either within their own business or by other companies or individuals."
Raj Chada, a partner at law firm Hodge Jones & Allen, said the Alstom arrests were emblematic of a more aggressive approach to corruption investigations being pursued by the SFO and the Government.
"This should send a stark warning to the City," Mr Chada said. "This has already led to several prosecutions and settlements. One can expect more such investigations in the future."
The latest high-profile arrests come just weeks after the conclusion of an eight-year investigation into the defence giant BAE Systems, also over allegations of using bribery to win overseas contracts. In early February, the company admitted two criminal charges and agreed to pay fines of £286m to settle cases in both the US and the UK.
The £250m deal with the US Department of Justice (DoJ) admitted a charge of "conspiring to make false statements" to the US government. The investigation included charges relating to deals with the Hungarian and Czech governments, and also bribes in connection with Saudi Arabia's £40bn Al-Yamamah fighter-jet deal.
The company "made hundreds of millions of dollars in payments to third parties, while knowing of a high probability that money would be passed on to foreign government decision-makers to favour BAE in the award of defence contracts", the DoJ said.
In the UK, the company pleaded guilty to a breach of duty to keep accounting records, a charge relating to a 1999 air-traffic control system contract with Tanzania. The last activities under investigation were in 2002 and the settlements were designed to draw a line under the long-running saga. BAE Systems' chief executive, Ian King – who took over in mid-2008 – maintains the company has changed its culture.
The Campaign Against Arms Trade (CAAT) and The Corner House have challenged the settlement, claiming such serious charges should be heard in court. But, after an earlier injunction in their favour, the call for a judicial review was thrown out by the High Court yesterday. The groups are considering an appeal. CAAT's Kaye Stearman said the decision "implies that the law allows a giant company to pay a small financial penalty for 'accounting irregularities' rather than be charged and tried in open court on more serious criminal charges."Reuse content