BOMBARDIER INC.

INDUSTRY

Manufacturing

CORPORATE HEADQUARTERS

Montreal, Quebec, Canada

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: Azerbaijan

Summary of Allegations:

Trans-Signal-Rabita LLC is an Azerbaijani firm that formed a consortium with Bombardier and its Russian subsidiary in 2013. The consortium won a USD 340 million contract to install signalling equipment and fiver-optic cables. Trans-Signal-Rabita's share was 44 million Azerbaijani manats (approximately USD 56.8 million). The owner of Trans-Signal-Rabita LLC is an electrician who lives on a farm 250 km outside Baku. The owner started the company in 2008 at the urging of someone close to him, but does not run the company.

In 2012, the deputy general director of Bombardier's Moscow office, met with managers of Azerbaijan Railways and representatives of the committee that would evaluate bids for the project. The officials agreed to draft the tender documents so that Bombardier would win. At that meeting, the Azerbaijani officials recommended that Bombardier include Trans-Signal-Rabita in its bid. Officials at Azerbaijani Railways are closely connected to Trans-Signal-Rabita.

In addition, the Azerbaijani branch of Bombardier Transportaion (Signal) Ltd. ordered sets of interlocking systems from Multiserv Overseas Ltd. ("Multiserv") for train stations in Azerbaijan. The order was for USD 104.8 million. Multiserv had purchased the same equipment from Bombardier Sweden for only USD 19 million. The equipment was not shipped to Multiserv, a shell company registered in the U.K., but instead shipped directly to Azerbaijan.

Multiserv is a company that appears to exist only on paper. It is linked to the son of a close associate of the former president of Russian Railways. Multiserv has also served as an intermediary for another, similar Bombardier project in Russia.

And Bombardier Transportation AB ("Bombardier Transportation") allegedly channeled millions of dollars in bribes to unidentified Azerbaijan officials through Bombardier Transportation to Azerbaijani authorities to win the 2013 USD 340 million tender to supply Azerbaijan with an interlocking system for railway switches and signals called the Ebilock-950.

 


Approximate Alleged Payments to Foreign Officials: millions of dollars in bribes

Business Advantage Allegedly Obtained: win multi-million dollar contracts

Nationality of Foreign Officials: South Africa

Summary of Allegations:

Bombardier, along with four other companies, was part of a consortium that constructed a high-speed rail line that links Pretoria and Johannesburg with O.R. Tambo International Airport.

Bombardier allegedly hired Youssef Zarrouk as an agent to assist with winning the contract for the rail line. The company allegedly agreed to pay Zarrouk US $35 million if the company won the contract. Zarrouk, in turn, allegedly hired Peter-Paul Ngwenya, a self-described "influential individual in political circles," and agreed to pay him more than US $5 million. All parties deny that any bribes were paid.


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: US $3 billion contract to construct a rail line

ENFORCEMENT RESULTS

Agencies: South Africa: Office of the Public Protector
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

South Africa's Office of the Public Protector is investigating the transaction.



Agencies: Sweden: Prosecution Authority, Anti-Corruption Unit
Results: Prosecution of Individuals
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

In October 2016, Swedish prosecutors raided Bombardier in Sweden.

On 10 March 2017, Evgeny Pavlov, Head of Sales, Marketing and Country Coordinator for the North Region with Bombardier Transportation Sweden AB, was ordered held in custody for two weeks to prevent him from fleeing or tampering with evidence. The arrest was made in connection with the Azerbaijani signaling project. Two other Bombardier employees were briefly detained during the same week but were released with no formal charges. They both remain as suspects as the investigation continues. Pavlov—who has denied any wrongdoing—was formally charged in August 2017 with bribing a government official.

Bombardier confirmed that an employee had been questioned by police and indicated its full cooperation with the authorities.

On August 29, Pavlov pleaded innocent at trial. On 4 September 2017, Pavlov's lawyers argued that Pavlov was not empowered to make decisions about whom Bombardier would partner with on a $340-million contract. That decision, they said, needed to be made at the "group level," implying the Berlin headquarters of Bombardier Inc.'s rail unit, Bombardier Transportation. On 11 October 2017, the Swedish court found Pavlov to be innocent of bribery and he was released from custody. The court in a statement said that “The prosecutors have not proved that the charged person has promised or offered an inappropriate benefit."  Prosecutors indicated that they are pursuing preliminary investigations into higher-ranking Bombardier employees. On 25 October 2017, prosecutors appealed the ruling.



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