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Wed November 14 2018

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French authorities place Lafarge SA under investigation

29 Jun LafargeHolcim has been informed that subsidiary Lafarge SA is being being placed under investigation in France.

The decision was made by the examining magistrates presiding over a case relating to the operation of the Jalabiya cement plant in Syria by Lafarge Cement Syria between 2011 and 2014.

The company has received the legal charges put forward concerning individual wrongdoings in the former Syria operations of Lafarge Cement Syria, a subsidiary of Lafarge SA.

LafargeHolcim said that the placement of Lafarge SA under judicial investigation was expected given that several of its former managers have previously been placed under judicial investigation.

Lafarge SA added that it will appeal against charges that do not fairly represent its responsibilities. It does admit that the system of supervision of its Syrian subsidiary did not allow it to identify wrongdoings at the level of the subsidiary. It said that the wrongdoings were the result of an unprecedented violation of internal regulations and compliance rules by a small group of individuals who have left the group.

LafargeHolcim chairman Beat Hess said: “We truly regret what has happened in the Syria subsidiary and after learning about it took immediate and firm actions. None of the individuals put under investigation is today with the company.”

He added: “LafargeHolcim was formed in 2015 out of two proud champions, each with a tradition reaching back over 100 years. Prior to the merger the Lafarge Group had a comprehensive compliance program which was breached. We have further strengthened the compliance program and culture since the merger, to make sure that similar mistakes will not happen again. I believe our compliance culture is strong through our entire Group and with our dedicated employees we will overcome individual wrongdoings.”

As soon as LafargeHolcim became aware of the irregularities that occurred in Syria, the board in 2016 commissioned an investigation, which was undertaken by independent external legal advisers experienced in complex international matters. The main findings of the investigation were made public in April 2017 and revealed that the local company provided funds to third parties to work out arrangements with a number of armed groups, which included sanctioned parties.

This report and more than 260,000 documents collected for the investigation were handed over to the French authorities. On several occasions, including this week before the examining magistrates, the company confirmed that unacceptable individual errors were made in Syria until the site was evacuated in September 2014. It said that it firmly regrets the errors and that it will continue to cooperate fully with the legal authorities in this case.

MPU

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