Authorities in Sweden arrested an executive and questioned several others from international engineering and manufacturing firm Bombardier as part of an investigation into corruption in Azerbaijan.
A March 17 report by the Organized Crime and Corruption Reporting Project (OCCRP) said Bombardier Transportation AB is suspected of paying “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom.”
The UK intermediary was identified as Multiserv Overseas Ltd.
Swedish anti-corruption prosecutor Thomas Forsberg told the OCCRP that Multiserv Overseas has “no employees or business.”
Bombardier is headquartered in Montréal, Canada. It produces aircraft and train equipment.
In 2013, the OCCRP said, the Stockholm-based train division won a $350 million contract to supply Azerbaijan with an interlocking system for railway switches and signals.
Contracts obtained by Swedish investigative reporters apparently showed “Bombardier Sweden selling equipment to Multiserv Overseas, which then [sold] the identical equipment back to Bombardier’s Azerbaijan affiliate for an inflated price.”
Multiserv made a profit of $85.8 million in the deal, the OCCRP said.
“The money was then channeled offshore,” according to the report.
Export records showed deliveries of the equipment directly from Bombardier Sweden to Azerbaijan and not to Multiserv.
The Bombardier employee arrested on March 10 was Evgeny Pavlov, a Russian citizen. His LinkedIn profile lists him as a Bombardier sales executive.
Police said Pavlov is suspected of aggravated bribery.
Thomas Forsberg from the prosecutors office said several others at Bombardier’s Sweden operation were served a “notice of suspicion.”
A Bombardier Sweden spokesperson, Barbara Grimm, told the OCCRP that Multiserv Overseas “is a bona fide company, we have done due diligence with them. They meet our code of ethics.”
The investigation in Sweden began after the OCCRP published a report in April 2016 showing alleged links between Multiserv Overseas and close associates of Vladimir Yakunin, the former president of Russian Railways.
The report alleged that Multiserv was an intermediary for a similar Bombardier deal in Russia.
Bombardier trades on the Toronto Stock Exchange under the symbol BBD. The company has about 66,000 employees. Revenues last year were $16.3 billion.
Richard L. Cassin is the publisher and editor of the FCPA Blog.