ABB, a Swiss engineering and technology group, has been slapped with a $4.3 million fine in connection with a bribery scandal in South Africa. The company was found to have paid bribes to officials in exchange for contracts to supply equipment to state-owned power utility Eskom. This is not the first time ABB has been embroiled in a corruption scandal; the company has also been fined for bribery in China, India, and the United States.
The Attorney General’s office on Friday said the penalty was imposed on ABB for “not having taken all necessary and reasonable organisational provisions in order to prevent bribery payments to foreign officials in South Africa”.
The fine was the result of an investigation by the Swiss authorities, who found that ABB had made payments to foreign officials in South Africa in order to secure contracts. ABB has cooperated fully with the investigation and has taken steps to improve its internal controls.
ABB and South Africa’s National Prosecuting Authority (NPA) this week reached an agreement that the company will pay reparations for its involvement in state corruption, the crime agency said on Thursday. The NPA said in a statement that ABB would pay $4.3 million as part of a plea agreement.
The company will also improve its internal controls and cooperate with authorities in their ongoing investigations. This is a positive step towards holding those who engage in state capture accountable and ensuring that the proceeds of corruption are returned to the people of South Africa.
The company agreed to pay 2.5 billion rand ($144.51 million) in punitive reparations to South Africa. This payment will cover the cost of the damages caused by the company’s illegal activities. The NPA’s statement said that the payment will be made within 60 days from Dec. 1. This will help to rectify the harm that was done and bring some measure of justice to the people of South Africa.
This is in addition to 1.6 billion rand ($92.48 million) the company paid back to South African state power utility Eskom in 2020. The repayment followed a deal brokered by the South African government in 2019 to help Eskom, which was facing bankruptcy.
In June 2022, a wide-scale investigation into state corruption concluded with ABB being found guilty of improper payments and other compliance issues at the Kusile power station.
The findings of the investigation were damning, and showed that ABB had used corrupt means to secure the construction contract for the power station. This led to a major scandal, and resulted in the company being fined and banned from doing business in South Africa.
Reuters contributed to this report