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Thu 22 Dec 2011 11:01 AM

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Ferrostaal fined $183m for bribery by Munich court

The German engineering firm is partly-owned by Abu Dhabi’s Commodore Contracting

Ferrostaal fined $183m for bribery by Munich court
Ferrostaal is partly-owned by Abu Dhabi’s Commodore Contracting

German engineering firm Ferrostaal, which Abu Dhabi’s Commodore Contracting has a stake in, was fined €140m ($183m) by a Munich court in a bribery case related to the conduct of two former employees.

The fine is the result of an agreement between the company, prosecutors and the judges, court spokeswoman Margarete Noetzel said in an e-mailed statement. The sanction was issued as part of a verdict in the trial of two former company managers accused of paying bribes in Greece and Portugal.

Ferrostaal said at the beginning of the trial on December 15 that it was willing to pay the fine, which was the result of “intensive negotiations.” The company said in a statement this week that it would bear the consequences and pay the fine.

The two former company managers, identified only as Johann- Friedrich Ha., 73, and Hans-Dieter Mue., 73, were convicted of bribery and received suspended prison terms of two years. Ha was also fined 36,000 euros and must pay 30,000 euros to charities to have the term suspended. Mue was fined €18,000 and must pay €22,000 to charities, according to the statement.

Prosecutors had been probing Ferrostaal, which manages the development of industrial and petrochemical plants, since 2009 to determine whether it bribed officials for contracts.

Abu Dhabi-owned investment fund the International Petroleum Investment Company (IPIC) bought a 70 percent stake in the company in 2009 from German firm MAN.

Last month, MAN and IPIC agreed to sell their jointly held unit Ferrostaal to Hamburg-based investor MPC, ending more than a year of wrangling over the unit. MAN said in a statement it would pay €350m ($464.4m) to buy back the Ferrostaal shares from IPIC, with MPC to then buy the unit from MAN for a price of up to €160m.

"This settlement is the outcome of very good cooperation between both shareholders, and enables IPIC and MAN to finally put their differences aside," IPIC's Managing Director, Khadem Al Qubaisi, said.

Abu Dhabi’s Commodore Contracting acquired a 25 percent stake in MPC Industries earlier this month, German paper Handelsblatt reported, citing MPC.

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