Last July, it was learned that South Africa’s Swiss energy and automation technology group ABB sued two former employees on charges of corruption and fraud. As a result, ABB had to make a provision of US$ 325 million.
Swiss Federal Prosecutor’s Office: They issued a sentence for “violation of the criminal law”. As a result, ABB will be fined CHF 4 million and ABB will also have to cover litigation costs of CHF 50,000. The maximum legally possible penalty in Switzerland for this offense is 5 million Swiss Francs. The Zurich-based group accepted the sentencing order and related allegations, according to the federal prosecutor.
ABB was accused of bribing public officials in South Africa and that ABB did little to thwart them. Specifically, it concerned contracts for the construction of a coal-fired power plant in South Africa. It was stated that the defendants damaged the electricity company Eskom, which was involved in the construction, of which ABB was the contractor, by taking bribes. ABB South Africa received orders worth at least US$200 million in bribes of at least 1.3 million Swiss francs.
Comparison with South Africa and America?
ABB managed to reach an agreement with South African law enforcement yesterday. As part of the deal, ABB has committed to pay R$2.5 billion, equivalent to approximately CHF 135 million. ABB has thus also accepted responsibility for the suspicious criminal behavior of its employees.
The South African authority appreciated ABB’s willing cooperation with law enforcement in the investigation. In Switzerland, ABB’s willingness to cooperate was taken into account as a mitigating measure.
The matter is not quite over yet: a settlement is still expected today between ABB and American authorities – the Department of Justice and the U.S. Securities and Exchange Commission – according to the federal prosecutor’s office. (SDA/rae)