Alstom raided in Swiss probe into corruption

Alstom SA had offices of a Swiss unit raided as an investigation into alleged corruption and contract bribes at the French power-plant maker widens.

One person, “strongly” suspected of abusing duties, has been arrested, Switzerland's attorney general said in a statement. The probe is centered on a former executive of Alstom Prom AG in Baden, as well as other currently unknown persons. Alstom spokesman Patrick Bessy confirmed the raids and said a retiree has been questioned.

The probe is not linked to other allegations involving Alstom, the attorney general said. Switzerland has already called on French prosecutors to help investigate whether the Paris-based engineer paid hundreds of millions of dollars in bribes to gain customers in Asia and South America from 1995 to 2003. A bribery scandal at rival Siemens AG spans at least 12 nations and cost the German company $2 billion last year.

“In the past, investors have not reacted too heavily to bribery probes,” Virginie Vacca, an equity analyst at Standard & Poor’s who has a “strong buy” rating on Alstom, said in a telephone interview. “If we look at what happened at Siemens they might not be as sensitive as we might expect.”

Alstom advanced 1.3 per cent to ¤65.56 in Paris trading as of 10:27 a.m. local time. The stock has declined 11 per cent this year, valuing the company at ¤19 billion ($28 billion). Siemens has dropped 32 per cent in the same period, pushed lower by writedowns on contracts.

Dubious Payments: Alstom has installed power stations that generate a fifth of the world's electricity, built two-thirds of the world’s high- speed trains and supplied subway cars used by commuters in Paris, London, New York and Sao Paulo.

Its larger rivals in the power- plant market are General Electric Co, based in Fairfield, Connecticut, and Munich-based Siemens AG. Siemens has since 2006 faced allegations its employees used bribes to win contracts.

“Findings up to date suggest that other companies belonging to the Alstom Group have made corrupt payments to officials or functionaries via the Alstom Prom AG based in Baden, which in some cases might have led to the awarding of contracts,” the attorney general said.

Premises in central Switzerland, around Zurich, and in Baden were searched yesterday, including the offices of Alstom AG there. Homes in a number of cantons were also raided. More than 50 officers from the Federal Criminal Police and included several French police officers, conducted the search, according to the statement.