Canadian planemaker Bombardier is facing a probe by the UK’s Serious Fraud Office (SFO) related to its dealings with Indonesian airline Garuda Indonesia. Bombardier is being investigated for suspected bribery involving CRJ-1000 purchase and lease deals in 2012.
What we know about the investigation
On Thursday, the SFO announced it was opening up an investigation involving Bombardier CRJ jets procured by Garuda Indonesia. The SFO has remained tight-lipped about the investigation. In a news release, the anti-corruption office stated,
“The SFO is investigating Bombardier Inc over suspected bribery and corruption in relation to contracts and/or orders from Garuda Indonesia. As this is a live investigation, the SFO can provide no further comment.”
Both Bombardier and Garuda Indonesia are cooperating with the investigation. Bombardier has restructured its leadership several times over the past decade, with current CEO Eric Martel claiming the manufacturer was “not aware of any issue internally.” The company has hired external lawyers to carry out an internal review.
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Corruption charges against ex-CEO of Garuda
The case against Bombardier involves the same transactions investigated during a probe into the dealings of former Garuda Indonesia CEO, Emirsyah Satar. Along with two associates, Mr Satar was detained in August 2019 by Indonesian authorities after a two-year probe into Garuda’s business transactions with Rolls-Royce and Airbus.
The ex-CEO was later found guilty of bribery and money laundering and jailed for eight years in May this year. While the probe revolved around overpayments Mr Satar received on deals for Airbus planes and Rolls-Royce engines, investigators at the time grew suspicious of deals involving Bombardier too.
A global anti-corruption drive
The latest investigation comes amid intensifying efforts to target corruption in the aviation industry. Anti-corruption authorities worldwide, including the SFO and the U.S Department of Justice, have so far discovered evidence of corruption in six countries going back over a decade.
In January, Airbus agreed to pay a record $4bn in fines over alleged corruption related to its third-party agent network. This came after engine-maker Rolls Royce was forced to cough up over $800m to defer charges after a probe into suspected bribery in 2017.
What now for Bombardier?
According to Reuters, Bombardier has known about the probe for several weeks and plans to fully cooperate. Crucially, the SFO initiated the investigation into Bombardier, rather than the company bringing it to the attention of authorities. Bombardier Chief Executive Eric Martel claimed,
“We got contacted a couple of weeks ago and we’re going to offer our support so they can do the investigation they need to do.”
In the UK, companies investigated for corruption can mitigate fines and punishments by proactively bringing evidence of corruption to light themselves. As Bombardier failed to do so, the company may be hit with severe punitive measures as part of the global anti-corruption drive in aviation.
Will Bombardier face a serious fine or be let off lightly in the current economic climate?