Leading company implicated in Lesotho bribery case


November 11, 2003

One of the world’s leading electrical companies, Schneider Electric, has been implicated in a R16 million bribery case in the Lesotho High Court. The alleged bribery relates to the construction of the now-completed Lesotho Highlands Water Project. French-based Schneider calls itself one of the world’s leading manufacturers of equipment for electrical distribution, industrial control and automation. It boasts operations in 130 countries.

During the first half of 2003 the company achieved sales of R33.4 billion. It recently brought a high court application Schneider claims it has been improperly brought before court and denies that it can be held liable for 17 alleged instances of bribery that took place from May 1988 to August 1994. Schneider faces 17 charges related to alleged payments that the company Spie Batignolles made to Masupha Sole, the former head of the Lesotho Highlands Development Authority. Spie Batignolles won contracts worth millions of rand in the Highlands project. One of them was worth some R582 million in 1990, and Spie merged with Schneider in 1995.

Judge Thamsanqa Nomngcongo is expected to rule before the end of this year. June 1, 2004 had already been set as a starting date for the trial, prosecutor Guido Penzhorn said today. In an affidavit filed at the court, Juan Pedro Salazar, a representative for Schneider, maintained that Spie Batignolles, in May 1995, transferred all its Highlands contracts to fellow French company Gesilec.

These included Spie’s benefits as the leading partner of two consortiums that also won contracts. The parties further agreed that Gesilec be renamed Spie Batignolles. So-called “Spie 1,” the company that was originally awarded the Highlands contracts, merged with Schneider at around the same time, Salazar maintained. “Spie 1” was renamed first Schneider and later Schneider Electric following the merger. Shchneider had no further interest or involvement in the Highlands contracts which were transferred to so-called “Spie 2,” Salazar maintained.

In 1999, Lesotho authorities served a summons for Martin Alexander Lins in his capacity as a servant of one of the Spie consortiums. Salazar argued that this was not sufficient to bring Schneider “properly before the court.” Not only was Lins not a servant of Spie, he was not from the consortium and he was also not involved with the “Spie 2” that had merged with Schneider.

Penzhorn and his team, representing the Lesotho Crown, maintained that “Spie 1” was never substituted in Lesotho. The alleged substitution was in any event not lawful because the partners in the Spie consortiums never gave prior consent, Penzhorn argued. This case is the third in which a multinational is being prosecuted in the Lesotho High Court for alleged bribery relating to the Highlands Project.

Categories: Lesotho, Odious Debts

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