South African law enforcement agency, the National Prosecution Agency, has reached a settlement with ABB in a corruption case. The agency said on Thursday that as part of the deal, ABB will pay Ryu 2.5 billion, the equivalent of about $150 million.
With the agreement, ABB recognized and assumed responsibility for the alleged criminal behavior of its employees in connection with contracts with the electricity company Eskom. The official statement praised ABB’s willing cooperation with law enforcement in the investigation.
The case concerned the Kusile thermal power plant built by Eskom, of which ABB is the contractor. When asked about the company, “ABB has reached full and final agreement with the Director of the National Attorney General’s Office in South Africa on the remaining issues related to the Kusile project, which won the award in South Africa in 2015.”
The penalty payment is expected to affect cash flow in the fourth quarter of the current year. ABB said the amount is “part of the total of approximately $325 million previously recognized in third-quarter 2022 earnings.” They want to find a final solution to the outstanding issues in the case in the near future.
The agreement was negotiated in cooperation with partner countries USA, Switzerland, Italy and Germany. Most of the penalty payment goes to South Africa. No further information was included in the notification regarding any payments to other countries.
South African judicial authorities had already arrested two former employees of the ABB Group and their spouses last summer. They were charged with corruption, fraud and money laundering. At the end of 2020, ABB reached an agreement with Eskom. The company paid approximately $104 million at the time, and all parties reimbursed each other for all contractual claims.
(SDA)