WASHINGTON, December 23 (Sputnik) – French power and transportation company Alstom $772 million bribery fine will not impact its takeover deal with General Electric (GE), the French company officials told Sputnik in a statement.
“As indicated during the recent shareholders’ meeting where the transaction with General Electric on Alstom’s energy businesses was approved…the resolution of the DOJ [US Department of Justice] investigation will not have a material impact on the overall economics of this transaction,” the statement said on Monday.
Alstom has reached an agreement with the Department of Justice (DOJ) to resolve the investigation into alleged violations of the US Foreign Corrupt Practices Act (FCPA). Two US subsidiaries pleaded guilty to violating the books and records and internal controls provisions of the FCPA, and agreed to pay some $772 million penalty.
“The DOJ has also stipulated that no part of the fine can be passed on to General Electric as part of the projected sale of Alstom’s energy businesses,” according to the release.
Alstom CEO Patrick Kron explained in the statement that bribery problem arose from the company’s use of external success fee sales consultants hired to support the commercial teams.
“In order to ensure that Alstom strives for the best compliance procedures, Alstom has discontinued the hiring of such Sales Consultants,” Kron said.
Kron added that they regretted “a number of problems in the past”.
“However, this resolution with the DOJ allows Alstom to put this issue behind us and to continue our efforts to ensure that business is conducted in a responsible way, consistent with the highest ethical standards,” he said.
On December 19, Alstom’s Extraordinary Shareholders’ Meeting approved the transaction to sell Alstom’s Energy businesses to General Electric, and the closing of the sale is expected in the second quarter of 2015.
The DOJ alleged the Alstom bribed government officials to win business in other countries, including Indonesia, Egypt, and Saudi Arabia.
Alstom paid more than $75 million in total to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million, according to the DOJ statement.