In a disclosure that echoes the recent travails of its German rival Siemens, Switzerland-based automation technology supplier ABB Inc. on Friday announced that it has made a fourth-quarter, pre-tax provision of $850 million in the face of corruption investigations in the United States and Europe.
The company also attributed the set-aside to the “anticipated impact of a pending tax dispute, asset write-downs, and restructuring charges relating to the weaker business environment.”
Disclosure of the suspicious activities at the heart of the corruption probes dates back to mid-2007, when ABB sold its Lummus Global unit. At the time, ABB divulged that its due diligence in preparing for the divestiture had unearthed “certain suspect payments in a number of countries."
Separate investigations are ongoing into suspect payments in the United States and alleged anti-competitive practices in Europe. ABB rival Siemens last week announced that it would pay €1 billion in fines to U.S. and German authorities in a bribes-for-contracts scandal. ABB has not announced any actual settlements.