ABB pays 327 million for corruption in South Africa
Two subsidiaries of the ABB group, in Switzerland and South Africa, have pleaded guilty to violating the US Foreign Corrupt Practices Act.
ABB on Friday agreed to pay a total of $327 million to the United States, South Africa, Switzerland and Germany to settle corruption charges. The case concerns the Kusile coal-fired power station in South Africa.
Its construction, started in 2008 and tainted by suspicions of massive corruption, took years of delay and caused a major energy crisis in South Africa. The country faces daily power cuts and energy supply difficulties are expected to persist for several years.
The Swiss-Swedish electrical engineering group is accused of having paid bribes to a senior official of the public electricity company Eskom, which manages this plant, to obtain confidential information, then to drop out, in 2015 , contracts for control and instrumentation systems. The former Eskom boss was arrested in connection with the case at the end of October, along with others, for corruption, money laundering and fraud.
Four million paid in Switzerland
According to a statement from the United States Department of Justice, which does not specify the amount paid in the United States, the total sum of the criminal fines amounts to 315 million dollars. A department spokesman later clarified that it did not include a $12 million civil fine imposed by the US Financial Markets Constable (SEC), without giving further details on the breakdown of the penalties.
Two of the group’s subsidiaries, in Switzerland and South Africa, have also pleaded guilty to violating the US Foreign Corrupt Practices Act (FCPA), the ministry said. ABB had already paid $104 million in compensation to South Africa in 2020 and on Thursday reached an additional agreement with the South African authorities providing for the payment as “punitive reparation” of 2.5 billion rand (133 million francs).
The Swiss authorities had for their part announced earlier in the day on Friday that they had reached an agreement with ABB providing for the payment of a fine of 4 million Swiss francs (4.3 million dollars). Germany has also taken legal action and discussions are ongoing.
ABB cooperation
The US Department said in its statement that it took into account in its decision the fact that ABB had cooperated with its investigation and put in place more extensive control systems. He also notes the fact that ABB has already been convicted twice in the United States, in 2004 and 2010, for corruption cases.
The company took this case “very seriously”, said its general manager, Björn Rosengren, quoted in a separate press release. Since the case came to its attention, “ABB has cooperated fully with all authorities and has dedicated a great deal of time and effort – including launching a new code of conduct, training employees and implementing put in place an improved control system – to prevent a similar situation from happening again,” he added.
The settlements of $327 million have already been recognized in third quarter 2022 financial results, ABB said in its statement. They include the planned exposure to the German case.
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