ABB pays dearly for alleged kickbacks

Swiss-Swedish engineering firm ABB has paid $58.3 (SFr57 million) to settle a United States bribery probe connected with the oil-for-food programme in Iraq.

This content was published on September 30, 2010 - 12:05 and agencies

ABB was accused of paying kickbacks to secure contracts in two separate cases in Iraq and Mexico between 1999 and 2004. The firm neither admitted nor denied the charges, but said it was tightening up compliance procedures.

The US regulator, the Securities and Exchange Commission (SEC), alleged that ABB made illegal payments of at least $2.7 million to win contracts at two government owned electric utilities.

These alleged kickbacks, said to include a Mediterranean cruise, helped make the company more than $100 million in revenues, the SEC claimed.

In a separate case, the SEC said ABB funneled bribes through a Jordanian subsidiary to the former Iraqi regime between 2000 and 2004. The alleged bribes are thought to have helped secure contracts under the United Nations oil-for-food scheme that generated $13.5 million in revenues for the firm.

ABB said it had voluntarily disclosed suspicious transactions to the SEC in 2005 and had cooperated with the investigation. The company also said it was complying with an SEC order to tighten up its compliance programme.

“ABB is committed to fostering a culture where integrity is woven into the fabric of everything we do,” the firm’s general counsel, Diane de Saint Victor, said in a statement.

Last year, ABB was fined €33.8 million (SFr45 million) by the European Commission after an investigation into alleged price fixing. The case was unrelated to the SEC bribery probe.

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