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Sun 2 Mar 2008 01:36 PM

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Alba suing US firm for over $1bn

Aluminium Bahrain victim of conspiracy involving overcharging, fraud and bribery, court papers allege.

Alba suing US firm for over $1bn
LEGAL ACTION: Alba is suing Alcoa for more than $1 billion in damages, local media has reported. (Getty Images)

Aluminium Bahrain (Alba) is suing US aluminium firm Alcoa for more than $1 billion in damages for an alleged 15-year conspiracy involving overcharging, fraud and bribery, local media reported on Sunday.

The Wall Street Journal revealed on Thursday that state-owned Alba had filed a lawsuit against Alcoa in US federal court, claiming the company had overcharged it for alumina, a key ingredient in aluminium production, and paid kickbacks to a Bahraini government official.

Bahrain's Gulf Daily News said on Sunday court documents seen by the newspaper detail a string of allegations related to overcharging, threats to cut of the supply of alumina, and bribes paid to at least one government official to secure contracts.

The documents describe how in 2003 Alcoa unsuccessfully attempted to acquire a controlling stake in Alba at a depressed price and extort excessive fees, threatening to cut off its alumina supply if Alba did not meet its demands, according to the newspaper.

The documents state that this threatened Alba's "very existence", Gulf Daily News said.

In another instance, the documents allege that a four-year contract signed in 2005 was inflated by around 10%, leaving Alba paying an additional $65 million a year, the newspaper said.

According to the documents, Alba only discovered the alleged fraud last year due to a cover-up by Alcoa.

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