By Claire Ferris-Lay
Bahrain’s Alba sues for $1bn damages for overpayment of raw materials to US firm
Firms affiliated with US aluminium giant Alcoa - and controlled by the billionaire businessman at the centre of a UK corruption case - paid $9.5m in bribes to executives at Bahrain’s Alba, to ensure the firm overpaid for the cost of its raw materials.
State-owned Alba, which is suing for $1bn in damages, said it overpaid $450m to Alcoa for raw materials over a period of twelve years, the Associated Press said, citing court documents.
A lawsuit on behalf of Alba claims British investor Victor Dahdaleh, who is currently facing bribery charges in the UK, earned at least $13.5m in illegal commissions for deals he brokered with the firm.
“Defendants’ conspiracy succeeded in exacting hundreds of millions of dollars in overpayments from Alba and deprived Alba of the honest service of one or more of its officers, directors or employees,” the lawsuit said.
Alba said the bribery was so extensive Alcoa tried to acquire a 26 percent stake in the firm for $600m in 2004 when it should have paid $1bn. The deal later fell through.
Dahdaleh was arrested in November by Britain’s Serious Fraud Office on bribery charges. The 68-year old British/Canadian billionaire is alleged to have made payments of bribes to officials of Alba. He has denied any wrongdoing and is awaiting trial after posting $16m bail.
Alba, ranked as one of the largest aluminium smelters in the world, said it had bought alumina, the raw material needed to make aluminum, from Alcoa without incident and without the service of Dahdaleh or his companies acting as middlemen between 1969 and 1989.
But changes to Alco’s contracts in 1990 enabled Dahdaleh and his companies to bribe its officials to ensure it continued to award its contracts to Alcoa and overpay for raw materials, court paper claimed.
Alba’s complaint, filed on Monday in Pittsburg, details allegations previously described in a 2008 lawsuit. Alcoa requested the case be reopened following Dahdaleh’s arrest last month.
Alba said in November it had suffered “substantial losses” from a series of transaction at the centre of a UK fraud investigation. The aluminium smelter said it had recovered more than $30m to date but had still lost “very large amounts of money” through the contracts linked to billionaire Dahdaleh.
Dahdaleh’s website identifies him as the owner and chairman of Dadco, an investment, manufacturing and trading group with global operations.