By Kjetil Malkenes Hovland
OSLO--Norwegian defense company Kongsberg Gruppen ASA, charged
by police Tuesday with corruption, said it didn't act on suspicions
of undesirable business practices because an internal investigation
turned up no proof.
Kongsberg and one of its employees were hit with charges related
to the sale and delivery of communications equipment to Romanian
authorities, Chief Executive Walter Qvam said at a news conference
hours after the charges were disclosed by the company. The economic
crime unit of the Norwegian police searched the company's
headquarters in southern Norway, as well as an office in Asker, Mr.
Qvam said.
Marianne Djupesland, a prosecutor for Norway's national economic
crime unit, confirmed to The Wall Street Journal that the police
had carried out a search related to the charges, but didn't say
where or whether it had seized any materials. Ms. Djupesland
declined to comment on the actual charges.
The company's relationship with several Romanian ministries
began in the late 1990s and included contracts with a combined
value of about 1.4 billion Norwegian kroner ($233 million).
Kongsberg's dealings with Romania ended in 2007, Mr. Qvam said.
The charges come after Norwegian fertilizer producer Yara
International ASA accepted in January the country's biggest-ever
corporate fine for corruption at 295 million kroner, after
admitting it paid bribes in Libya, India and Russia.
Kongsberg is 50% owned by the Norwegian state. The state also
has a 36% stake in Yara.
In the Kongsberg matter, an internal corruption team and
PricewaterhouseCoopers consultants investigated potential
irregularities in Romania in 2012 to 2013, Mr. Qvam said, but the
internal investigation didn't uncover enough evidence to move
forward. Kongsberg "heard in the spring of 2012 through different
vague signals that there could be suspicion that the business
practice wasn't quite as it should be in parts of the business,"
the chief executive said.
Mr. Qvam said "we worked with the PwC investigation unit for
more than a year," on a "very complex and complicated task" related
to matters stretching "relatively far back in time." Company
leadership concluded the investigation in the fall of 2013 and
decided it didn't have enough information to take further action or
notify outside authorities.
Kongsberg Gruppen Chairman Finn Jebsen and the company's board
had been informed about the internal investigation during 2012 and
2013, and will meet Wednesday for a briefing about the recent
developments. "We take it very seriously that Kongsberg Gruppen has
been charged," Mr. Jebsen said at the news conference.
"No indictment has been made yet, and nobody's convicted in the
matter, so we'll see how this develops," Mr. Jebsen said.
Under Norwegian law, the corruption charges carry a maximum
penalty of 10 years in prison, and the company risks a corporate
fine. Mr. Qvam didn't identify the employee who was charged in the
matter but said the person was still working for the company. That
person wasn't identified by the police and hasn't issued any
statement.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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