US Attorney General Orders ABB to Pay US$315 Million for Bribing High Ranking Eskom Official in South Africa

  • ABB Ltd. (ABB), a Swiss-based global technology company listed on the New York Stock Exchange with core businesses focused on electrification, automation, motion, and robotics has agreed to pay more than US$315 million to resolve an investigation into violations of the Foreign Corrupt Practices Act (FCPA) stemming from the bribery of a high-ranking official at South Africa’s state-owned energy company, Eskom.
  • The official is believe to be ex Eskom interim CEO, Matshela Koko.  
  • The US Department of Justice’s resolution was coordinated with prosecutorial authorities in South Africa and Switzerland, as well as the U.S. Securities and Exchange Commission (SEC).

“This is the department’s first coordinated resolution with authorities in South Africa, where much of ABB’s criminal scheme was carried out, reflecting our commitment to relationship-building and our ever-deepening partnerships in the global fight against corruption,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.

“ABB bribed a high-ranking official at South Africa’s state-owned energy company in order to corruptly obtain confidential information and win lucrative contracts. In addition, our partners in South Africa have brought corruption charges against that official.  This resolution demonstrates the Criminal Division’s thoughtful approach to appropriately balancing ABB’s extensive remediation, timely and full cooperation, and demonstrated intent to bring the misconduct to the department’s attention promptly upon discovering it, while also accounting for ABB’s historical misconduct,” added Polite.

According to court documents and statements made in court, ABB entered into a three-year deferred prosecution agreement (DPA) with the department in connection with the filing of a criminal information in the Eastern District of Virginia charging the company with conspiracy to violate the FCPA’s anti-bribery provisions, conspiracy to violate the FCPA’s books and records provisions, and substantive violations of the FCPA. In addition, ABB subsidiaries ABB Management Services Ltd. (Switzerland) and ABB South Africa (Pty) Ltd. (South Africa) each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA.


Pursuant to the DPA, ABB’s total criminal penalty is $315 million. The US Department of Justice has agreed to credit up to one-half of the criminal penalty against amounts the company pays to authorities in South Africa in related proceedings, along with other credits for amounts ABB pays to resolve investigations conducted by the SEC and authorities in Switzerland and Germany, so long as payments underlying an anticipated resolution with German authorities are made within 12 months of today’s date.

“Corruption and bribery are not victimless acts. They can create hazardous working conditions, hurt honest businesses, and erode trust and integrity in local and global governance,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “This resolution reflects the need for accountability, recompense, and rehabilitation in the wake of these kinds of violations. I extend my appreciation to the law enforcement authorities in South Africa, Switzerland, and Germany for their invaluable assistance.”

According to ABB’s admissions and court documents, between 2014 and 2017, ABB, through certain of its subsidiaries, paid bribes to a South African government official who was a high-ranking employee at the state-owned and controlled energy company, Eskom Holdings Limited (Eskom) to obtain business advantages in connection with the award of multiple contracts.

ABB engaged multiple subcontractors associated with the South African government official and made payments to those subcontractors that were intended, at least in part, as bribes. ABB worked with these subcontractors despite their poor qualifications and lack of experience. In return, ABB received improper advantages in its efforts to obtain work with Eskom, including, among other benefits, confidential and internal Eskom information.

As part of the scheme, ABB conducted sham negotiations to obtain contracts at inflated prices that ABB had pre-arranged with the South African government official, all on the condition that ABB employ a particular subcontractor associated with that official. ABB also falsely recorded payments to the subcontractors as legitimate business expenses when, in fact, a portion of the payments were intended as bribes for the South African government official

Yesterday Switzerland’s attorney general fined ABB four million Swiss francs (around R75 million) for the same reason. The Swiss attorney-general stated that ABB admitted to not taking “all necessary and reasonable provisions” to prevent bribery payments to officials in South Africa.

In South Africa, the National Prosecuting Authorty’s Investigating Directorate (ID) has finalised a comprehensive settlement agreement with ABB to pay over R2,5 billion in punitive reparations to South Africa. This settlement represents a bold and innovative step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period.

The payment must be made into South Africa’s Criminal Asset Recovery Account (CARA) within 60 days from 01 December 2022. This agreement was reached in line with Section 64(e) of the Prevention of Organised Crime Act (POCA). It is reflective of the NPA’s two-pronged strategy to deal with corruption through prosecuting perpetrators and recovering the stolen money. This punitive amount is in addition to the R1.56 billion that ABB paid to Eskom in 2020. Read more 

Related news: Eskom welcomes the arrest of former ABB employees in corruption case

Pictured is Mr. Markus Bruegman. Bruegmann is accused 16 in a massive court case involving ABB and South Africa’s power utility, Eskom. Breugmann who was employed by ABB Group at the time, is said to be the person who first approached ex Eskom interim CEO, Matshela Koko, in 2013 with the purpose of establishing a corrupt relationship, according to the charge sheet. Image credit: Rock Tech Lithium

This settlement agreement was negotiated with partner countries, including the USA, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people.

The settlement has the immediate benefit of saving costs in the context of a protracted trial against the corporate entity (ABB Ltd), and securing funds upfront for the fiscus while ongoing criminal investigations into implicated persons continue.  The money, once paid into CARA, will be used as restitution for victims, and to assist in building South Africa’s capacity and resources in its ongoing fight against serious corruption.

Related news: Seven arrested with ex interim Eskom CEO, Matchela Koko, include his wife and step daughter

Author: Bryan Groenendaal


  1. At long last this braggart has been fingered and nailed to the wall to hang and dry.
    He has all along being playing a saint saying he is lily white clean.
    Now that it is out in the open that ge gas accepted bribe. Now charges are going to stick like glue

      • Finally, please let him pay for his crimes. When a hungery South African steal a bread, they get locked up, but big shots like that get scott free. Lock the criminal up. Look what he did to our country. THOUSANDS OUT OF WORK.Some branches of KFC going to close their doors dueto load shedding. Suppliers cant supply stock. So more people out of work. So sad that so many people must suffer for the greed of a few.

  2. Pingback: South Africa unraveling: Army called in to protect coal plants, after sabotage, theft and 200 days of rolling blackouts - Climate-

  3. Smoking Chicken on

    Not so fast. How are we to know that the reparations will be used for their intended purpose? The corrupt ANC government has run out of money for greasing their cadre network and this money will most likely disappear into the ether, leaving the South African people in the same position.

  4. Abram Joseph Sekgaphane on

    Thank you for a bold collaboration of the US , German and Switzerland Justice departments to finalize the heinous criminality within our state owned Entity. Let Justice prevail and perpetrators face the consequences with all implicated

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