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Sweden Opened Corruption Case Against Bombardier for Signaling Equipment Supplies to Azerbaijan
April 6, 2017
Swedish Police initiated an investigation on Bombardier Transportation, the Novaya Gazeta reports. The company’s executives and associates are suspected in bribing Russian and Azerbaijan railway officials for granting contracts to the Canadian company.
The investigation was started after the so-called “Panama Papers” were published. Bombardier associate, Evgeny Pavlov, was arrested in Sweden. Two Board Members are now suspects.
The Swedish Police is now working on a contract for signaling equipment supply to Azerbaijan. In 2013 Bombardier Transportation (Signal), Bombardier and RZD joint venture, won a contract for signaling equipment supplies. The JV was to supply Ebilock-950 systems at the total of 340 M USD. The deal was largely financed by the World Bank.
The Swedish Police believes that Bombardier was directly participating in drafting the tender documentation. The Novaya Gazeta quotes Evgeny Pavlov’s message sent in November 2012: “I had several unofficial meetings with Azerbaijan Railways’ management and local representatives of the World Bank. They are ready to conclude the tender documents in such a way that Bombardier fits all the requirements. Our partners ask to keep our negotiations in secret; therefore, we need to keep this secret within the company, too. In order to draft the “right” tender documentation, I suggest we establish a group of people we can trust”.
Bombardier’s associates also mentioned Yury Obodovsky and Alexey Krapivin in their internal correspondence as a “part of a close group of influential people having direct access to Vladimir Yakunin and, via him, to all heads of railways in former Soviet Union”, they were allegedly writing.
“It is hard for me to make any statements at this time as we don’t know yet how we will be using this info”, Thomas Fossberg from the Swedish Police commented. “But we will definitely try to trace the transactions. We see that Bombarder edited the tender documentation on the Azerbaijan tender so that it fits its needs. This support from the supplier’s side cannot be free of charge, of course. So, we suspect a bribe. But we cannot say who got the money”.
The Novaya Gazeta publishes the following deal:
1. the Swedish Bombardier sells signaling equipment to the British Multiserv Overseas Ltd. for 126 M SKK (19 M USD). Multiserv Overseas Ltd. has no office, no staff and its beneficiaries are registered in offshore companies. The company was registered in 2010 by Yury Obodovsky.
2. Multiserv Overseas Ltd. sells the same equipment to Bombardier Transportation (Signal)’s affiliate in Azerbaijan for 104.8 M USD (400% to the previous deal).
3. Multiserv Overseas Ltd. signs contracts, which the Novaya Gazeta believes fictitious, to transfer the funds to its beneficiaries through offshore companies.
4. Azerbaijan Railways acquire the signaling equipment at the full price.
5. The equipment is sent from Sweden to Azerbaijan without any involvement of the British company.
The investigation is ongoing.
The full article (in Russian) is available at: https://www.novayagazeta.ru/articles/2017/03/22/71861-semafor-sistemy-svoy-chuzhoy