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Brazil probes Bombardier, railway manufacturers for price-fixing allegations

Bombardier Inc. says it is co-operating with authorities in Brazil who are looking into alleged price-fixing in public transportation contracts, but denies any wrongdoing by its employees.

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Bombardier Inc. says it is co-operating with authorities in Brazil who are looking into alleged price-fixing in public transportation contracts, but denies any wrongdoing by its employees.

"We strongly believe that Bombardier Transportation in Brazil and our employees have always acted in compliance with the laws and our code of ethics," the company said in a statement Thursday.

It said the company "observes the highest ethical standards" regardless of country where it operates and will continue to fully co-operate with Brazil's investigation.

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Brazil said it has opened legal proceedings against Bombardier and several other major railway manufacturers for allegedly fixing prices on the construction and upkeep of public transportation systems in five cities.

The South American country's antitrust agency said in a statement Thursday that it will investigate the bidding process for contracts on the subway and train systems in Sao Paulo, Brasilia, Belo Horizonte, Porto Alegre and Rio de Janeiro.

The statement says 18 companies were part of a cartel involved in 15 projects valued at US$4 billion.

According to the government's official gazette, the companies included Bombardier's Berlin-based transportation division, Germany's Siemens, CAF of Spain, Mitsui of Japan and Alstom of France.

Bombardier added it is aware of the administrative proceedings and will respond and provide a defence.

The allegations first surfaced last summer when Brazilian politicians threatened to launch lawsuits to recoup public funds paid for public transit construction, equipment and maintenance after rising fares and poor service sparked nationwide protests.

With a report from Associated Press

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