German firm debarred over Lesotho fraud

23 November 2006

versión en español

In November, the Bank debarred German engineering firm Lahmeyer International over bribery convictions in the Lesotho Highlands Water project (see Update 52). Lahmeyer is barred from receiving Bank funds for up to seven years, but could see that verdict reduced by four years “if it proves its corporate behaviour has changed”. The decision to debar Lahmeyer for a crime for which it was indicted in 1999 “sends the wrong signal to other corporate bribers” says Patricia Adams of NGO Probe International. “The Bank should have taken swift action and suspended the company’s right to do business when they were originally indicted – as is allowed for under the US foreign corrupt practices act.”

Meanwhile, investigations of the European Anti-Fraud Office (OLAF) into the Lesotho case concluded in October, with three European companies from France, Italy and Germany fined a total of 4.4 million Euros.