Monday, December 31, 2018
Five convictions in SFO’s Alstom investigation into bribery & corruption to secure €325 million of contracts
Nicholas Reynolds was found guilty of conspiracy to corrupt today at Blackfriars Crown Court following an extensive investigation and prosecution brought by the Serious Fraud Office.
The conviction brings to four the number of total convictions in relation to this conspiracy to bribe officials in a Lithuanian power station and senior Lithuanian politicians in order to win two contracts worth €240 million. These individuals falsified records to avoid checks in place to prevent bribery and between them, the Alstom companies paid more than €5 million in bribes to secure the contracts.
The conviction of Nicholas Reynolds who is a UK national and former Global Sales Director for Alstom Power Ltd’s Boiler Retrofits unit followed a guilty plea from former Business Development Manager at Alstom Power Ltd John Venskus on 2 October 2017 and former Regional Sales Director at Alstom Power Sweden AB Göran Wikström on 22 June 2018 on the same charge. Alstom Power Ltd entered a guilty plea to conspiracy to corrupt on 10 May 2016.
In sentencing Göran Wikström HHJ Martin Beddoe said:
“This was a very serious example of bribery and corruption that beleaguers the civilised, commercial world and is a cancer upon it”
Venskus was sentenced to 3 years and 6 months imprisonment on 4 May 2018. Wikström was sentenced to 2 years and 7 months imprisonment on 9 July 2018. He was also ordered to pay £40,000 in costs.
Alstom Power Ltd was ordered to pay a total of £18,038,000 which included:
- A fine of £6,375,000
- Compensation to the Lithuanian government of £10,963,000
- Prosecution costs of £700,000
Nicholas Reynolds is due to be sentenced at Blackfriars Crown Court on 21 December 2018.
Lisa Osofsky, Director of the Serious Fraud Office said:
“The culture of corruption evident within the Alstom Group was widespread. Their illicit activities to win lucrative contracts were calculated and sustained, undermining legitimate business and public trust.
“These convictions were a result of a truly global investigation and I thank our case team for their effort and persistence in bringing the individuals and companies involved to justice.”
The SFO’s investigation involved cooperation with more than 30 countries including France, Canada, Hungary, Denmark, Austria, Slovakia, Czech Republic, Lichtenstein, Cyprus, Singapore, the Seychelles, India, Sweden, Lithuania, Switzerland and Tunisia.
Due to the lifting of reporting restrictions, the conviction of Alstom Network UK Ltd in a linked case can also now be reported.
Alstom Network UK Ltd were found guilty of one count of conspiracy to corrupt on 10 April 2018 for making corrupt payments to win a tram and infrastructure contract in Tunisia.
In return for its work in securing the €85 million contract, Alstom Network UK Ltd paid €2.4 million to a company called Construction et Gestion Nevco Inc, which Alstom Network UK Ltd itself acknowledged was a front for corruption when it decided not to make a final payment of €240,000 in its contract.
Staff within the Alstom Group helped the consultants produce paperwork to satisfy internal compliance checks, cobbling together ‘evidence’ of the services provided, which at best were of a nominal nature because the company was, in reality, just a conduit for bribes.
Graham Hill, Robert Hallett and Alstom Network UK Ltd were acquitted of other charges in this case, relating to alleged corruption to win transport contracts in India and Poland, on 10 April 2018.
Alstom Network UK Ltd will be sentenced at Southwark Crown Court on a date to be determined.
Alstom Network UK Ltd along with Michael Anderson, Terence Watson and Jean-Daniel Lainé were acquitted of a charge in a linked investigation into alleged corruption relating to a Budapest Metro rolling stock contract.
Notes to Editors
- The SFO investigation commenced in 2009 as a result of information provided by the Office of the Attorney General in Switzerland concerning the Alstom Group, in particular Alstom Network UK Ltd.
- The charges brought against the companies and individuals across all three linked cases were conspiracy to corrupt, contrary to s1 of the Criminal Law Act 1977 and s1 of the Prevention of Corruption Act 1906.
- Nicholas Reynolds (DOB 17 August 1965) was Global Sales Director for Alstom Power Ltd’s Boiler Retrofits unit, based in Derby.
- John Venskus (DOB 1 June 1943) was employed by Alstom Power Ltd as a Business Development Manager and on retirement by Alstom Power Sweden AB as a Relations Manager in Lithuania. He pleaded guilty on 2 October 2017.
- Göran Wikström (DOB 19 July 1950) was employed by Alstom Power Sweden AB as Regional Sales Director in Växjö, Sweden. He pleaded guilty on 22 June 2018.
- Alstom Power Ltd entered a guilty plea to one count of conspiracy to corrupt in relation to a contract to upgrade the burners at the Lithuanian Power Plant on 10 May 2016.
- Michael Anderson (DOB 18 January 1961) was Business Development Manager at Alstom Transport SA with responsibility for Eastern Europe, based in Paris.
- Jean-Daniel Lainé (DOB 7 April 1948) was, from 2006, Senior Vice President for Ethics and Compliance within Alstom International Network and a Director of Alstom Network UK, based in Paris.
- Terence Watson (DOB 13 November 1959) was, from 2006, Senior Vice-President for Europe and Central Asia within Alstom International Network, based near Paris.
- Alstom Network UK Ltd, Terence Watson and Jean-Daniel Laine were acquitted of a charge of conspiracy to corrupt on 28 November 2018.
- Michael Anderson was acquitted of the same charge on 29 November 2018.
- Graham Hill (DOB 13 July 1944) was Senior Vice President in Alstom’s Country Network based in Paris and a Director of Alstom International Ltd.
- Robert Hallett (DOB 31 May 1963) was Managing Director of Alstom Transport India.