Alba last night announced it had agreed an out-of-court settlement worth $447 million in a racketeering and fraud lawsuit against US-based Alcoa, a major aluminium producer.
The settlement value will be realised in a combination of cash and a long-term alumina sales agreement, Alba said.
The civil case against Alcoa alleged that related firms paid $9.5 million in bribes to ensure the Bahrain smelter overpaid for raw materials.
The money reportedly went to Bahrain officials and Alba executives, and resulted in the company paying $420 million in inflated prices between 1997 and 2009.
Speaking in Bahrain, Alba chairman Mahmood Hashim Al-Kooheji said: “This is an historic day in our long campaign to recover losses suffered by Alba over more than 20 years.”
Alba is one of the largest industrial companies in the Middle East and the fourth largest aluminum smelter in the world. The company’s shares are also listed on the Bahrain Bourse and the London Stock Exchange.
Alba’s civil suit, which was filed on February 28, 2008 against Alcoa, Alcoa World Alumina, and other individual defendants is the first case brought by a foreign business in a US court to recover losses resulting from alleged corrupt activity by corporations and individuals in the US and elsewhere, the statement said.
The complaint alleges that the defendants made unlawful payments to officials in Bahrain. At the request of the US Department of Justice, the case was stayed for nearly four years to allow an investigation under the Foreign Corrupt Practices Act to proceed. On June 11, 2012, the US District Court denied motions by Alcoa and the other defendants seeking to dismiss Alba’s RICO claims and ordered the case to proceed to the discovery phase.
The settlement, which included no admission of liability, resulted in the release of all claims against Alcoa and the related Alcoa defendants.
Al-Kooheji added: “The new leadership of Alcoa is to be commended for this fair and transparent settlement, which marks a turning point for Alba in its legal efforts to recover losses suffered over a long period of time. While we turn the page in our relationship with Alcoa, our shareholders, employees and the people of Bahrain should know that we will continue to manage Alba’s business with transparency and integrity.”
Alba yesterday received half of the $85 million Alcoa had agreed to pay in cash, as part of the settlement.
Alba is still pursuing legal action against billionaire businessman Victor Dahdaleh for corruption charges related to the supply of alumina - the raw material used in aluminium - and a trial is scheduled to begin in London in April. - TradeArabia News Service