Swiss Company ABB to Pay $315 Million in South African Bribery Probe

Published: 07 December 2022

Kusile Power Station Witbank South AfricaThe Kusile power plant near Johannesburg, site of alleged corruption, was awarded to Swiss industrial conglomerate ABB in 2015. (Photo: Bruce Paulmac, British Wikipedia, License)

By Inci Sayki

The Swiss-based automation and electrification company ABB agreed to pay $315 million to settle a multinational bribery investigation involving a high ranking official at Eskom, a South African state-owned energy company, the U.S. Department of Justice (DOJ) said Friday.

Two subsidiaries of ABB pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act (FCPA), and the settlement was reached with the cooperation of Swiss, German, and South African authorities, the DOJ’s statement said.

At the heart of the investigation is a corruption-riddled project near Johannesburg at the Kusile power station, a coal-fired plant under Eskom’s construction since 2007. The project was awarded to ABB in 2015.

According to court documents, between 2014 and 2017, ABB paid bribes to a South African government official who was a high-ranking employee at Eskom through its subsidiaries to gain confidential information and secure multiple contracts.

The Swiss company also engaged in “sham” negotiations with the South African official to obtain contracts at inflated prices and falsely recorded some of its bribe payments as business expenses.

The DOJ said that its South African counterparts have filed corruption charges against the Eskom official.

Bjorn Rosengren, ABB chief executive, said in a statement that they “take the Kusile matter very seriously,” and has put efforts into “launching a new code of conduct, educating employees and implementing an enhanced control system – to prevent something similar from happening again.”

In total, ABB said its settlements add up to $327 million with multiple agencies, including the DOJ, and that they expect to reach an agreement with the German authorities soon.

In October of this year, eight people, including Eskom’s former CEO, were arrested on corruption charges for ABB work related to the Kusile project.

The settlement marks the third of this type for ABB, which had two other criminal FCPA resolutions in the past, one in 2004 and one in 2010. A subsidiary of the company also pleaded guilty in 2001 for bid rigging.