- The UK Serious Fraud Office (SFO) says it’s investigating Bombardier (BBD.B) over a number of suspected bribery and corruption matters
- According to the SFO, the allegations relate to the near decade-old sale of aircraft to Indonesian carrier Garuda
- Last May, a former Garuda chief executive was convicted of corruption and money laundering following a series of transactions involving various aircraft manufacturers
- This is thought to include the sale of Bombardier’s CRJ1000 jets, which dates back to 2011
- The investigations comes hot on the heels of Bombardier’s third quarter financial results, and eliminated all share price gains seen earlier today
- Bombardier (BBD.B) is currently down 1.69 per cent to C$0.29 per share
The UK Serious Fraud Office (SFO) says it’s investigating Bombardier (BBD.B) over a number of suspected bribery and corruption matters.
According to the SFO, the investigation relates to the near decade-old sale of aircraft to Indonesian carrier Garuda.
Last May, a former Garuda chief executive and an associate were convicted in Indonesia of corruption and money laundering following a series of transactions involving several aircraft manufacturers.
This is thought to include the sale of Bombardier’s CRJ1000 jets, which dates back to 2011.
The Montreal-based plane and train maker said in a statement that it has “launched an internal review conducted by external counsel,” and that so far no charges have been laid against the company or any of its employees.
Earlier today, Bombardier’s share price saw a 6 per cent jump following the release of its third quarter financial results. However, these gains were quickly wiped off with the news of the investigation.
The company said free cash flow usage for the period was US$706 million (C$), which supports working capital requirements for what is expected to be a strong fourth quarter.
This is anticipated to include the delivery of around 12 Global 7500 jets over the next three months, representing and increase compared to the eight delivered in the third quarter.
2020 has seen an increasing focus by Bombardier on becoming a pure-play business aircraft company – a transition it took a major step towards achieving with the sale of its rail division to French train maker Alstom SA.
Eric Martel, President and CEO of Bombardier, commented on the company’s new direction.
“We are very excited about our future as a focused business jet company, about our opportunities to grow the services business, and to leverage our industry-leading product portfolio.
“We look forward to sharing the details of our plans in the near future, as we finalise our debt management strategy and cost- cutting initiatives to ensure our profitability in the current market and strong growth once the pandemic subsides,” he added.
Bombardier (BBD.B) is currently down 1.69 per cent to C$0.29 per share, as of 1:54pm EST.
