LafargeHolcim, the Swiss-French cement company, faces a French judicial inquiry into allegations it helped finance terrorism in Syria, a scandal that has already led to the exit of its chief executive.
The prosecutors’ office in Paris confirmed on Tuesday that three judges would start an investigation into a Lafarge cement plant that the company kept running as Syria descended into civil war. It was eventually evacuated in September 2014.
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Human rights groups have alleged the company helped finance terrorism and raised concerns about the safety of staff. Paris prosecutors had already started preliminary inquiries into possible dealings with sanctioned groups.
Last month, LafargeHolcim, which was formed in 2015 as the result of a €41bn merger between France’s Lafarge and Switzerland’s Holcim, admitted that “unacceptable measures” had been taken to keep the Syria plant running. It added then that “selected members of group management” were aware of possible violations of business conduct standards.
However, LafargeHolcim has so far published only a six-page summary of an extensive internal investigation prepared with law firms Baker McKenzie in Washington and Darrois Villey in Paris.
That summary confirmed the Syrian subsidiary had made unspecified payments to intermediaries to avoid disruption by local armed groups that “periodically interfered with employee transportation to and from the plant, restricted access to necessary supplies, and harassed customers”.
On Tuesday, LafargeHolcim said that it had not been contacted by the Paris prosecutor. “If approached, the group would co-operate with the prosecutor,” a spokesman said.
LafargeHolcim has not said whether it believes funds ended up ultimately with militant group Isis. However, Beat Hess, chairman, has confirmed payments had been made to secure the release of kidnapped staff in Syria. “Kidnappings occurred . . . certain payments have been made,” he told journalists last month. Such payments were “not material”, he added.
Eric Olsen, LafargeHolcim’s chief executive, said he will step down in July to help draw a line under the controversy but said he had not been involved in any wrongdoing. He will be replaced by Jan Jenisch, the boss of Swiss chemicals group Sika.
At the time the Syrian plant was operating, Mr Olsen was a senior manager at Lafarge. But LafargeHolcim has said its internal investigations had concluded he “was not responsible for, nor thought to be aware of, any wrongdoings”.
LafargeHolcim reported a 14.5 per cent increase on a like-for-like basis to SFr801m in adjusted operating profits before tax in the first three months of 2017 compared with a year earlier. Net sales were up 5.3 per cent at SFr5.6bn. (The Financial Times)
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