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Thu March 21 2019

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Strukton sets out details of Saudi contract at centre of Dutch corruption inquiry

28 Feb Strukton has published details of a Riyadh contract win that has prompted a raid of its offices by Dutch fiscal authorities seeking evidence of corruption.

The company said that it was “unpleasantly surprised” by this month’s raid by the Dutch Fiscal Information &  Investigation Service (FIOD). It has now received further information and has been told that the FIOD based the decision for the raid on audits by the tax authorities, leading to suspicion of corruption and false declarations when obtaining a contract for the metro project in Riyadh.

Strukton said that it is cooperating fully with FIOD.

“I think it is important to emphasise that there is no question of bribery whatsoever,” said Strukton chief executive officer Gerard Sanderink. “The project was awarded based on the lowest price.”

“In mid-July 2012, consortium leader FCC invited us to join the FAST consortium (consisting of companies including FCC, Alstom and Samsung) to bid for the metro project in Riyadh,” said the company’s statement. “We knew FCC and Alstom from operational collaborations. The FAST consortium was consequently prequalified for the metro project. Strukton has a limited role in the consortium with share of ca. 15%. The consortium is responsible for the pricing and tender for the project. The tender was submitted to the customer on 20 February 2013.

“The FAST consortium offered the lowest price for all six lines to be built. The customer decided to award the contract for three of the lines (4, 5 and 6) to the FAST consortium. The other lines were awarded to two other consortia.

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“Shortly before submitting the final offer, we appointed the company of Somo as an agent. This company receives a fixed percentage of the contract sum for its activities. Somo did not have a role in the pricing and submitting of the tender. We have searched an agent with sufficient experience to facilitate us in this major, logistic challenge in a busy metropolis during the years of execution. A clear written assignment was issued, also stating that all activities should be done in accordance with applicable laws and regulations. Payments are directly done to this company, based on invoices and solely through banking payments. This makes all of it transparent and traceable.

In addition to logistic support, Somo also provides support by eliminating obstacles preventing us to operate in eg the case of political unrest. Somo is not doing any other activities for us other than those related to the Riyadh metro project.

“Following the restrictive audit opinion as to Strukton’s 2016 financial statements, Atradius Dutch State Business performed a reassessment of the Export Credit Insurance (EKV) policy in 2018 based on the relation between Strukton and Somo. This reassessment led to willingness of the State to renew the payment obligation concerning the insurance contract with retrospective effect, leading to unchanged coverage.

“To conclude, we wish to point out that we are strongly committed to conducting business with integrity and will never pay bribes. We always comply with our Code of Conduct as part of the Strukton All Right programme and ensure that our employees do so as well.”

MPU

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