The U.K.’s Serious Fraud Office is investigating Bombardier Inc. over what the agency described as suspected bribery and corruption related to deals with airline PT Garuda Indonesia.
Bombardier disclosed the investigation Thursday with its third-quarter financial results. The Canadian plane and train maker said it had launched an internal review of transactions with Garuda, including the acquisition and lease of Bombardier CRJ1000 aircraft in 2011 and 2012.
Garuda, which is majority-owned by the Indonesian government, didn’t respond to requests for comment.
A Bombardier spokeswoman said the company is cooperating with the SFO probe.
The SFO’s investigation is the latest corruption probe involving companies in the aerospace industry, some of which have been the subject of large corporate settlements in recent years.
The U.K. agency, which investigates and prosecutes complex fraud, bribery and corruption, confirmed the investigation in a short statement Thursday, adding it wouldn’t provide further comment because it is an active investigation.
Bombardier said it began an internal review of the Garuda transactions after an Indonesian court in May convicted a former chief executive of Garuda and an associate of corruption and money laundering in connection with procurement processes involving different manufacturers, including Bombardier. Bombardier wasn’t charged, nor were any of its employees, the company said.
Bombardier said its investigation into the Garuda transactions was being conducted by an external counsel.
“The Corporation has met with the SFO to discuss the status of the Corporation’s internal review and its potential assistance with the SFO investigation on a voluntary basis,” Bombardier said in the disclosure.
The former Garuda executive, Emirsyah Satar, was sentenced in May to eight years in prison, fined roughly $69,700 and ordered to pay restitution of about 2.1 million Singapore dollars, equivalent to $1.6 million, according to Indonesia’s Corruption Eradication Commission. A lawyer representing Mr. Satar didn’t immediately respond to a request for comment.
The Indonesian anticorruption agency said at the time that he received bribes worth millions of dollars through an intermediary related to contracts and orders involving Bombardier, French manufacturers Airbus SE and Avions de Transport Regional, and U.K.-based Rolls-Royce. Many of the transactions were concealed through multilayered structure businesses across jurisdictions, the agency said.
“Airbus has taken significant steps to reform itself and to ensure that this conduct will not reoccur,” an Airbus spokesperson said in an email. “Airbus has significantly enhanced its compliance system under the supervision of an Independent Compliance Review Panel.”
A Rolls-Royce spokesperson declined to comment. A spokesperson for ATR didn’t immediately respond to requests for comment. The SFO didn’t respond to a request for additional comment.
Previously, Rolls-Royce Holdings PLC in 2017 agreed to pay more than $800 million to settle corruption probes with authorities in the U.S., U.K. and elsewhere in a case that examined dealings with intermediaries in a number of overseas markets.
And Airbus in January agreed to a sweeping 3.6 billion euros, equivalent to $4 billion, deal with American, U.K. and French prosecutors to settle alleged bribery and export-control violations.
Bombardier last year agreed to sell its regional-jet business, which includes the CRJ1000, to Mitsubishi Heavy Industries Ltd. , for about $550 million, in a deal that closed this year.
Source – WSJ