World Bank suspends German firm over Lesotho case

The World Bank suspended contracts November 6 to Lahmeyer International, a German company found guilty of paying bribes involving the multi-billion-dollar Lesotho Highlands Water project.

Lahmeyer, a privately held engineering firm, is barred from receiving World Bank funds for up to seven years, but could see that verdict reduced by four years if it shows greater transparency and proves its corporate behavior has changed, the Bank said in a statement released in Johannesburg.

Lahmeyer was fined 10 million rand (US$1.63 million) in 2003 after being found guilty of bribing Masupha Sole, former head of the Lesotho Highlands Development Authority, a major public works project in the small southern African kingdom.

Lesotho courts charged three other companies with paying bribes to win lucrative deals in the project, including Impregilo, an Italian construction company, Canadian firm Acres International, and French engineering firm Spie Batignolles, now Schneider Electric. Impregilo lost an appeal earlier this year.

Sole was convicted in 2002 and sentenced to 15 years in jail. Construction is under way on the US$8 billion scheme to builds dams in Lesotho to supply water to Gauteng, the thirsty industrial center of South Africa.

The European Anti-Fraud Office (OLAF) issued a statement in October, noting the High Court of Lesotho wrapped up a major portion of the corruption investigation, levying fines totaling US$5.6 million against the three European companies. (HNN 10/6/06)


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