Bombardier's Swedish branch embroiled in corruption scandal related to Azerbaijani contract

By bne IntelliNews March 13, 2017

The Swedish branch of Canadian aerospace multinational Bombardier is suspected of bribing its way into a $350mn contract with the government of Azerbaijan, a new investigation reveals.

According to the Organised Crime and Corruption Reporting Project (OCCRP), Sweden-based Bombardier Transportation AB used an UK-based shell company - Multiserv Overseas - to pay bribes to unnamed Azerbaijani officials. The intermediary company appears to have made $85.8mn in profit from the $350mn deal signed in 2013, whereby Bombardier was to supply Azerbaijan with interlocking systems for railway switches.

Swedish authorities have launched an investigation into Bombardier Transportation AB. So far, they have detained one Bombardier employee, Evgeny Pavlov, and questioned several others, OCCRP reports. A regional head of marketing and sales, Pavlov was placed in pretrial custody in order to prevent him from fleeing Sweden for his country of origin, Russia, or tampering with evidence.

Several copies of the contracts signed between the Azerbaijani branch of Bombardier and Multiserv recovered by OCCRP through Swedish sources appear to indicate that the price of the interlocking systems was overestimated by a factor of 4.5. The systems were never delivered to Multiserv, but directly to Azerbaijan.

Multiserv appears to have served as an intermediary in another Bombardier deal with the Russian government. The company has no website or contact information.

In response to the investigation in Sweden, Canadian Prime Minister Justin Trudeau said that the Canadian government expected its companies to uphold the highest ethical standards while operating abroad. He also defended Ottawa's plans to lend Bombardier $372.5mn to support its Global 7000 jet programme and CSeries, The Star reported on March 10. 

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