The U.K. Serious Fraud Office (SFO) on Thursday confirmed it is investigating plane maker Bombardier over suspected bribery and corruption in relation to contracts and orders from Indonesian airline carrier Garuda Indonesia.
In a brief news release, the SFO said it can provide no further comment on the ongoing probe.
Announcement of the investigation follows the May sentencing by Indonesia’s anti-corruption agency, Komisi Pemberantasan Korupsi (KPK), of Emirsyah Satar, the former chief executive officer of Garuda, and Soetikno Soedarjo, the beneficial owner of Singapore-based consulting firm Connaught International, for corruption and money laundering. Satar was sentenced to eight years in prison, and Soedarjo received six.
According to the allegations, Satar had received IDR46 billion rupiahs (U.S. $3.2 million) in bribery payments from Soedarjo in exchange for securing maintenance and procurement contracts for Rolls-Royce, Airbus, Bombardier, and Avions de Transport Regional. The bribery payments were said to have originated from the commissions received by Soedarjo from each of these airline manufacturers.
Soedarjo allegedly received Macquarie bonds worth $200,000 from Bombardier through Hollingworth Management International and Summerville Pacific relating to the purchase of Bombardier CRJ100 aircrafts dating back to 2011, according to the KPK.
“At the moment, many of these illicit transactions are concealed through multi-layered structure businesses transaction across various jurisdictions. Therefore, collaboration with other law enforcement institutions from other countries is a must for an effective corruption investigation,” said KPK Chairman Firli Bahuri in a statement at the time. The ongoing investigation includes cooperation and assistance from the SFO.
“No charges have been laid against Bombardier or its employees in connection with this matter,” a Bombardier spokesperson tells Compliance Week. “In accordance with best practices when such allegations come to our attention, we have launched an internal review conducted by external counsel, and we are cooperating to the investigation open by the [SFO], which has contacted Bombardier further to the Indonesian judgments. We have no further update to provide at this time.”
Bombardier’s compliance enhancements
In February 2020, Export Development Canada (EDC), Canada’s export credit agency and a state-owned enterprise wholly owned by the Government of Canada, concluded in an independent review of Bombardier’s compliance policies and procedures that the company was progressing toward a best-in-class ethics and compliance program.
The EDC first initiated the review of Bombardier in August 2019, following leaked preliminary findings from a World Bank investigation into a 2013 contract Bombardier Transportation had with Azerbaijan Railways. As Compliance Week previously reported, a March 2017 report by the Organized Crime and Corruption Reporting Project—a consortium of nonprofit investigative centers and media outlets around the globe—alleged Bombardier Transportation paid “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom.”
The EDC said the review confirmed Bombardier’s executive management has “prioritized making compliance and ethics central to the company’s culture,” and that the company “has made significant investments to strengthen its compliance and ethics program.”
Bombardier in 2019 developed new company-wide compliance and ethics policies that are “benchmarked to world standards, which are in the process of being implemented by procedures, processes, and training for employees within all business units,” the EDC said. “Additionally, Bombardier has been building its compliance and ethics team, allocating significant financial resources and hiring additional personnel to support the implementation of the new policies and related activities. The company is also currently undertaking an enterprise-wide compliance risk assessment and has committed to addressing any identified gaps.”