Bombardier Falls as U.K. Investigates ‘Suspected Bribery’
(Bloomberg) -- Bombardier Inc. fell after the U.K’s Serious Fraud Office confirmed that it was investigating the company over “suspected bribery and corruption.”
The probe involves the company’s dealings with PT Garuda Indonesia, the SFO said in a statement Thursday. The airline ordered Bombardier CRJ regional jets, with the first delivery in 2012.
“As this is a live investigation, the SFO can provide no further comment,” the SFO said. Garuda’s President Director Irfan Setiaputra said the airline will “actively coordinate with the authorities to ensure the company’s full support of the investigation.”
Indonesia’s anti-corruption agency last year detained Garuda’s former head as part of a probe into procurement of aircraft and engines.
The SFO inquiry adds a new complication for Chief Executive Officer Eric Martel’s attempt to remake Bombardier into a builder of private jets after the company sold its CRJ business to Mitsubishi Heavy Industries Ltd., unloaded a commercial-jet program to Airbus SE and agreed to merge its rail unit with Alstom SA.
Bombardier dropped 1.7% to 29 Canadian cents at 11:44 a.m. in Toronto, erasing gains earlier in the session.
Before trading opened, the Montreal-based company reported a wider-than-expected loss for the third quarter and said it had begun an internal review by outside counsel into its transactions with Garuda.
Bombardier said the review was launched shortly after an Indonesian court convicted Garuda’s former head and his associate of corruption and money laundering in May. The charges were in connection with five procurement processes involving different manufacturers, including the 2011-2012 acquisition and lease of Bombardier CRJ1000 aircraft by Garuda, Bombardier said in a statement.
No charges were laid against Bombardier or any of its directors, officers or employees. The company said it understands that the SFO’s investigation involves the same transactions.
“The corporation has met with the SFO to discuss the status of the corporation’s internal review and its potential assistance with the SFO investigation on a voluntary basis,” Bombardier said.
A Swedish court three years ago acquitted a Bombardier employee of bribery in connection with an Azerbaijan rail contract.
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