A former vice-president of Bombardier Transportation’s rail control solutions division is not guilty of aggravated bribery in connection with a business deal in Azerbaijan, a Swedish court ruled on Wednesday.
Thomas Bimer, who is Swedish, was not aware of any wrongdoing, his defence team told the Stockholm District Court during the trial in November. The indictment had said Mr. Bimer provided an “undue benefit” to a public servant in Azerbaijan. The court found that it was not clear any payments related to the deal were improper.
Mr. Bimer’s lawyer, Tomas Nilsson, told The Globe and Mail his client was “very satisfied with the outcome.”
“I especially note the court’s acquittal already on objective grounds, that it has not been shown that this even was bribery,” Mr. Nilsson said.
The prosecution alleged that Bombardier and its local partner in Azerbaijan, Trans-Signal-Rabita LLC, and the government-owned Azerbaijan Railways (ADY), colluded to rig the specifications so a Bombardier-led consortium secured a contract worth US$340-million in 2013. An ADY official represented the local partner.
The contract was for installing a railway signalling system in the former Soviet country.
The defence told the court Mr. Bimer was not authorized to approve a deal of that scale.
For Trans-Signal-Rabita, the deal was worth US$100-million, which is also the size of the bribe, prosecutors argued. It is the second biggest case of alleged bribery to reach a Swedish court.
Bombardier itself was not charged with any crime. In Sweden, charges can be pressed against individuals only, not companies. The corporation nevertheless denied wrongdoing.
In its verdict, the court said there are seemingly inappropriate circumstances in the case, but the evidence is “thin in parts.” It is not obvious that the tender was rigged to Bombardier’s benefit, for instance.
It is not clear to what extent the Azeri railway official could influence the procurement, the court said. That, “and that the prosecutors not have been able to disprove that Bombardier for acceptable business reasons chose TSR as a local partner in Azerbaijan, leads to the District Court’s position that it is not beyond reasonable doubt that events unfolded the way the prosecutors claim they did.”
“The need of a local partner may have been the reason for the partnership,” the court wrote.
The court can therefore not conclude that the benefit to the Azeri official (the US$100-million) is improper, it said.
The project was largely funded by a loan from the World Bank, which has said in preliminary findings of an audit that a shell company registered in Britain called Multiserv Overseas Ltd. was used to “funnel bribes.” Bombardier has denied the allegation.
However, the court noted that the “circumstances around, and the set-up for” contracts between Bombardier and Multiserv “seem very strange and there is reason to believe that they were not businesslike.” But, the court noted, since the prosecutors did not include the contracts in the criminal charges, “the deal lacks importance for the assessment of any improper benefits.”
One of the contracts was signed by Mr. Bimer.
Mr. Nilsson said he was pleased that the court apparently had accepted his client’s explanations of circumstances in the case.
The verdict can be appealed. Even if Mr. Bimer’s acquittal stands, Bombardier’s headache from the Azerbaijan deal is not over.
The World Bank has yet to announce its final conclusions. The U.S. Department of Justice is also looking into the Azerbaijan project.
Multiserv made US$86-million for no apparent business reasons. The company had no office, no telephone number and no employees.
The Swedish prosecutors said Russian partners behind Multiserv directed Bombardier to team up with Trans-Signal-Rabita, but they couldn’t charge anyone in Sweden in connection with the mysterious payments.
Chief prosecutor Staffan Edlund concluded that the court disagreed with his interpretation of the evidence. He told The Globe he had not yet decided whether to appeal.
“We have to analyze this first,” he said.
Mr. Edlund said he did not, considering the court’s reflections on the nature of the deal with Multiserv, regret that he hadn’t added those circumstances to the criminal charges. “We have investigated those as much as we could, but we do not think we can press charges against anyone in Sweden based on what we found.”
Several former Bombardier Transportation executives had been suspects in the case, including ex-president Peter Cedervall, but the prosecutors eventually dropped the charges against them.
Mr. Edlund said before the trial that Mr. Bimer was likely to be the only remaining Bombardier executive to be tried in the Swedish case. There is also no evidence that Bombardier officials in Canada had any detailed knowledge of Trans-Signal-Rabita.
Bombardier spokeswoman Anna Cristofaro said on Wednesday the company has been following the trial closely and is pleased with the judgment. She repeated a previous statement that Bombardier has found no evidence suggesting any payment of a corrupt nature was offered to a public official and that conducting business with integrity and the highest ethical standards is a priority for the company. She declined to comment further, saying the matter continues to be reviewed by regulators.
Investors are keeping close tabs on the outcome of the Swedish court proceedings and other reviews of the case because of its potential impact on Bombardier’s balance sheet. The company sold its rail unit to France’s Alstom SA earlier this year, but agreed to compensate Alstom for any damages or penalties awarded in relation to the case. Bombardier has an indemnity for compliance matters to Alstom secured by a €250-million bank guarantee.
The Globe reported in November that the Russian partners, according to the Swedish investigation, were approved already in 2010 by senior Bombardier management in Canada. The partners have since been involved in a number of deals in former Soviet countries.
The Azerbaijan deal has been tried in the Stockholm district court once before. A colleague of Mr. Bimer’s, former sales manager Evgeny Pavlov, was acquitted of bribery in 2017. A Russian national, Mr. Pavlov returned to his home country before the case came up in an appeals court in 2020, and did not appear.
Bombardier Transportation ran its rail control solutions division largely from Stockholm.
Convictions of foreign bribery in Sweden are unusual, even though some of the Scandinavian country’s major export companies have been accused of corrupt practices abroad throughout the years.
With reports from Nicolas Van Praet