Business
Probes into France’s Alstom for alleged bribing in S. America
By MercoPress 9/5/08
May 9, 2008 - 3:35:58 PM

Earlier this year Alstom was warded the contract to build a high speed train linking Buenos Aires with Argentina’s two main cities, Rosario and Cordoba.

Alstom CEO Patrick Kron acknowledged probes into what he described “old affairs” adding that they predated his appointment at the helm of the corporation.

The probes were reported by the Wall Street Journal.

Newspaper articles “refer to old affairs in the 1990s about which I know nothing, neither about the projects in question or about the people concerned,” Kron said adding that “we are collaborating and we will continue to collaborate with judicial authorities”.

French and Swiss officials are investigating whether Alstom paid hundreds of millions of dollars in bribes to gain contracts in Asia and South America.

A French judicial official in Paris confirmed that France opened a corruption probe in November 2007 against “X”, not Alstom. In France, it is fairly common to open an investigation against “X” in the preliminary stages. An Alstom statement said Tuesday that no legal action has been brought against the company.

Asked about allegations of commissions for a Sao Paulo subway expansion cited by the Journal, Kron said simply that Alstom has been in Brazil for 50 years, furnishing the Sao Paulo metro. “I have no response,” he said.

Paying “commissions” to foreign officials used to be permissible in many European countries and the payments themselves were tax deductible in France.

Kron was queried during the announcement of a 56% increase in Alstom net profit for the past fiscal year.

The French engineering giant recorded net income for the year ended March 31 of 852 million Euros, up from 547 million Euros a year earlier, in a business climate that CEO Kron said should assure continued positive performance.

Alstom sales were up 19% to 16.9 billion Euros from 14.2 billion Euros and orders climbed 23%. Cash flow was abundant, 119% increase, erasing 64 million Euros in debt on March 31, 2007, and ending with 904 million Euros in net cash on March 31, 2008.