MONTREAL — Bombardier Inc. is facing a possible ban from World Bank-financed projects after it received a show-cause letter related to a rail equipment deal plagued by corruption allegations.
The letter is the latest development in an ongoing investigation into a roughly $340-million contract awarded to a Bombardier-led consortium in 2013 to supply signalling equipment for a 500-kilometre section of a rail corridor connecting Asia and Europe via Azerbaijan.
A show-cause letter, which came from the bank’s Integrity Vice Presidency, typically requires a company or individual to make their case as to why disciplinary action should not be taken after alleged wrongdoing.
Bombardier says it disagrees with the allegations in the letter, which include accusations the company engaged in delaying practices or obstructive behaviour regarding the audit. A spokesman for the Montreal-based company says the conclusions represent preliminary findings rather than formal accusations.
The World Bank says it takes allegations of fraud and corruption seriously, but declined to comment on the ongoing probe.
In one of the country’s biggest corruption cases to date, Sweden appealed in 2017 the acquittal of a Russian employee in Bombardier’s Swedish branch for aggravated bribery involving an Azerbaijan Railway Authority employee. The train maker says in its latest annual information form that an appeal trial is expected next year.
Companies in this story: (TSX:BBD.B)
The Canadian Press