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Engineering / Construction
Zurich, Switzerland
Nationality of Foreign Officials: South Africa
Summary of Allegations:
According to court documents, between 2014 and 2017, ABB, through certain of its subsidiaries, paid bribes to a South African government official who was a high-ranking employee at the state-owned and controlled energy company, Eskom Holdings Limited (Eskom) to obtain business advantages in connection with the award of multiple contracts. ABB engaged multiple subcontractors associated with the South African government official and made payments to those subcontractors that were intended, at least in part, as bribes. ABB worked with these subcontractors despite their poor qualifications and lack of experience. In return, ABB received improper advantages in its efforts to obtain work with Eskom, including, among other benefits, confidential and internal Eskom information.
As part of the scheme, ABB conducted sham negotiations to obtain contracts at inflated prices that ABB had pre-arranged with the South African government official, all on the condition that ABB employ a particular subcontractor associated with that official. ABB also falsely recorded payments to the subcontractors as legitimate business expenses when, in fact, a portion of the payments were intended as bribes for the South African government official.
Approximate Alleged Payments to Foreign Officials: US$37 million
Business Advantage Allegedly Obtained: US$160 million
Agencies: Germany: Unspecified, South Africa: National Prosecuting Authority, South Africa: Special Investigating Unit, Switzerland: Unspecified
Results: Settlement
Year Resolved: 2022
Compliance Monitor:
Ongoing: No
Details:
In its Form 20-F SEC filing on 28 March 2019, ABB disclosed that it reported compliance issues in South Africa relating to Eskom to the DOJ, SEC, authorities in South Africa, Germany, and Switzerland.
On 11 December 2020, according to ABB’s official statement, it has reached a settlement with the SIU and Eskom and expected to pay US$ 104 million. The investigation by the NPA is ongoing.
On 25 November 2022, it was reported that ABB Ltd was nearing a deal to pay around USD $325 million to resolve bribery allegations in South Africa. The pending settlement is between ABB and US, German, Swiss, and South African authorities. The settlement is expected to be finalized soon.
On 01 December 2022, it was reported that ABB had agreed to pay USD $144.51 million in punitive reparations to South Africa within 60 days.
On 2 December 2022, the U.S. Department of Justice announced that ABB Ltd. agreed to pay more than US$315 million to resolve an investigation into violations of the FCPA resulting from the bribery of a high-ranking official at South Africa's Eskom.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results: Civil Penalty, Criminal Penalty, Disgorgement
Year Resolved:
Compliance Monitor:
Ongoing: No
Details:
In its Form 6-K filed with the SEC on 8 February 2017, ABB announced that the company self-reported allegations of improper payments to third parties in its past dealings between ABB's subsidiaries and Unaoil to the DOJ and the SEC. The company is cooperating with the relevant authorities.
In its Form 20-F SEC filing on 28 March 2019, ABB disclosed that it reported compliance issues in South Africa relating to Eskom to the DOJ, SEC, and local agencies.
On 25 November 2022, it was reported that ABB Ltd was nearing a deal to pay around USD $325 million to resolve bribery allegations in South Africa. The pending settlement is between ABB and US, German, Swiss, and South African authorities. The settlement is expected to be finalized soon.
On 2 December 2022, the U.S. Department of Justice announced that ABB Ltd. agreed to pay more than US$315 million to resolve an investigation into violations of the FCPA resulting from the bribery of a high-ranking official at South Africa's Eskom.
On the same date, the U.S. Securities and Exchange Commission announced charges against ABB Ltd. for violations of the FCPA. The company agreed to pay $75 million in civil penalty and more than $72 million in disgorgement.