ABB

In December 2022, Switzerland-based multinational technology company ABB reached a “full and final settlement” of $327 million in total, with the National Director of Public Prosecution in South Africa, the US DOJ, SEC, and the Office of the Attorney General of Switzerland related to the legacy Kusile project in South Africa, awarded in 2015 (source: ABB press release, 2 Dec 2022). An international team of FRA experts – including specialists in regulatory investigations, disgorgement and penalty calculations, financial controls and compliance remediation – supported the company and their external counsel through their cooperation with the various authorities over more than three years.

This ABB settlement was shortlisted in the GIR Awards 2023 category for Most Important Development of the Year.

FRA’s involvement

The US Department of Justice investigation into ABB for violations of the Foreign Corrupt Practices Act (FCPA) began in 2019, stemming from the bribery of a high-ranking official at South Africa’s state-owned energy company. FRA was initially engaged to help the company and its counsel navigate a multi-jurisdictional investigation and gains calculation for the settlement.

Subsequently, FRA also performed a review of the company’s anti-bribery and corruption control environment as part of the ongoing improvements to its compliance program. This review focused on financial and non-financial controls to mitigate the risk of bribery, corruption and fraud, and to identify opportunities for enhancement. FRA also undertook a wide range of testing to support remedial control enhancements. Experts from various FRA locations worked closely with the company’s internal audit and compliance functions and Counsel, and provided our independent reporting.

Successful resolution

In reaching the final resolution, the Department of Justice considered a number of factors, including:

- “ABB’s extensive remediation, including carrying out a root-cause analysis of the misconduct and making significant investments in compliance personnel, compliance testing, and monitoring throughout the organization”; and

- “ABB’s commitment to further enhance its compliance program and internal controls, including enhanced quarterly and yearly reporting on the status of its remediation efforts, the results of its testing of its compliance program, and its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced”.

(Source: DOJ press release, 2 Dec 2022)

Thanks to strong leadership and commitment from ABB senior management, plus unfailing counsel from Paul Hastings, FRA’s multidisciplinary team was delighted to help the company set an example by taking a collaborative approach to handling regulatory investigations and investing in improvements from lessons learnt. 

FRA’s support was instrumental on both the defense and remediation sides. So grateful to the entire FRA team for the extraordinary collaboration.

– ABB Chief Integrity Officer Natalia Shehadeh

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