26 May 2008

Nigeria: Julius Berger Named in Bribe-for-Contract Scandal

Lagos — Nigeria's embarrassing reputation as a haven of bribe-for-contract scandals is set to be further damaged with the new revelations coming from Germany.

Julius Berger Nigeria Plc, the civil engineering giant which dominates construction contracts in Nigeria, has been named as a conduit in the bribery of top officials of the Peoples Democratic Party (PDP) - but the company has stoutly denied the allegation of being part of the alleged scandal.

A German construction group, Bilfinger Berger, has been accused of paying kick-backs to PDP officials, the German news magazine Der Spiegel said last Saturday, according to reports monitored on www.earthtimes.org.

In a special investigative report to be published today, Der Spiegel said public prosecutors in Wiesbaden, in the centre of Germany, had confirmed an investigation of the company's role in the scandal.

The bribe-for-contract scandal is already being studied by US and French prosecutors, the magazine will report today.

The bribes were allegedly passed through Julius Berger, a Nigerian company in which the German group owns 49 per cent of the shares.

At the time of the alleged payments, the Bilfinger Berger group was said to be seeking the contract to build a gas-liquefaction plant for Nigeria's gas-export industry.

The projects were not named in the report, neither was the amount of money revealed as the matter is still under investigation.

Commenting on the allegation yesterday, Head, Corporate Affairs, Julius Berger Nigeria Plc, Clement Iloba, said the Nigerian company was not involved in any such scandal.

"This is not the first time to hear that investigation is going on about the allegation. This must be the fifth time. The truth of the matter is that they just want to rope us into it.

"We are such an excellent company that we don't need to serve as conduit or bribe anybody to give us contracts. It's not our corporate policy to give bribe to anybody to get contracts. They just want to smear us. It's smear campaign," Iloba said.

Bilfinger Berger is the number-two international construction group in Germany, with expertise in big civil-engineering projects.

Bilfinger Berger, according to Spiegel, said it had alerted on its own the German prosecutors about the Nigeria issue at the request of US investigators and the US Securities and Exchange Commission.

The German company, however, is quoted as saying it did not believe its acts were "punishable".

Deutsche Presse-Agentur, a news agency, said Wiesbaden prosecutors could not immediately be contacted at the weekend to shed more light on the investigations and findings.

According to the German company's website, Bilfinger Berger AG was established in 1975 through the merger of three construction companies, each with its own long tradition.

Its historical roots reach back to 1880, when August Bernatz completed his first large project in what was then the German province of Lorraine .

In 1883, the builder settled in Mannheim and Grün & Bilfinger AG evolved from his company.

The other forerunners of Bilfinger Berger, Julius Berger Tiefbau AG and Berlinische Boden-Gesellschaft, were both founded in 1890.

The Dresdner Bank was a majority shareholder in all three companies. Under the aegis of Jürgen Ponto, the later Spokesman of the Bank's Executive Board, the plan evolved in the 1960s to build a large, internationally competitive construction company.

The first step was the merger in 1969 of Julius Berger AG with Bauboag, the successor of Berlinische Boden-Gesellschaft. In 1970, Grün & Bilfinger acquired a majority shareholding in this new company.

Five years later, in 1975, a merger took place to form Bilfinger + Berger Bauaktien-gesellschaft. The company changed its name in 2001 to Bilfinger Berger AG in the course of a strategic reorientation to become a Multi Service Group.

The latest revelation follows closely on the heels of a $32 million fine imposed on Willbros by the US government for bribing Nigerian officials.

The company, accused of bribing Nigerian and Ecuadoran officials, accepted that it violated the Foreign Corrupt Practices Act which prohibits American citizens or companies from bribing officials in order to get business deals.

Willbros employees agreed to make "corrupt" payments of over $6.3 million to Nigerian government officials to get a $387 million contract in a major natural gas pipeline project, court papers revealed.

The payments were said to have been made from 2003 to 2005.

Details of the Nigerian officials who received the bribes - or who were supposed to be bribed - were not made public.

In the last one year, several foreign companies have been accused or found guilty of paying bribes to get businesses in Nigeria.

Siemens, another German engineering company, was convicted of distributing bribes to Nigerian government officials to win contracts in the country.

Siemens was fined 201m euros ($248m) by a Munich court in October 2007 after being found guilty of paying bribes.

Siemens on its won had uncovered more than 1.3bn euros in "suspicious payments", with Nigerian ministers or officials alone having allegedly received 10 million euros between 2001 and 2004.

The company's chairman and chief executive both resigned over the scandal.

Siemens accepted the court judgment. It also agreed to pay 179m euros to the tax authorities.

Two weeks ago, it was reported that the US government was probing Halliburton for some questionable payments to Nigerian government officials.

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