A Russian employee in the Swedish unit of Bombardier has been formally charged with bribing a government official in Azerbaijan to win a $340 million contract for a new train signaling system.
Evgeny Pavlov, a Russian citizen, works for Bombardier Transportation Sweden AB.
Swedish prosecutors charged him Friday with aggravated bribery.
He was first detained in March following a report by the Organized Crime and Corruption Reporting Project (OCCRP).
The prosecutor’s office said then that several others at Bombardier’s Sweden operation were served a “notice of suspicion.”
The OCCRP report said Bombardier Transportation AB was suspected of paying “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom.”
Bombardier said Friday in a statement emailed to news outlets: “We take these allegations very seriously as they assert conduct that does not reflect our values or the high standards we set for ourselves, our employees and our partners.”
The UK intermediary was identified in March 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.
The Stockholm-based train division won a $350 million contract in 2013 to supply Azerbaijan with an interlocking system for railway switches and signals.
Copies of 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.
Pavlov’s LinkedIn profile listed him as a Bombardier sales executive. Through lawyers, he has denied any wrongdoing.
The Azerbaijan project is mostly funded by the World Bank, which is auditing the contract, CBC News said.
The OCCRP published an earlier report in April 2016 showing alleged links between Multiserv Overseas and close associates of Vladimir Yakunin, the former president of Russian Railways.
That 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.
Richard L. Cassin is the publisher and editor of the FCPA Blog.