The United Kingdom’s Serious Fraud Office (SFO) is investigating Bombardier Aerospace (BBA, Montréal Trudeau) over suspected bribery and corruption in relation to contracts and/or orders from Indonesian state carrier, Garuda Indonesia (GA, Jakarta Soekarno-Hatta).

The SFO in a short statement on November 5, 2020, confirmed this but declined to comment further as this was an ongoing investigation.

Bombardier said the investigation relates to the conviction in Indonesia in May 2020 of Garuda’s former Chief Executive Officer, Emirsyah Satar, and one of his associates, on corruption and money laundering charges. He was sentenced to eight years in prison, following a series of transactions involving various aircraft manufacturers, including the sale of CRJ1000ERs dating back to 2011-2012. Bombardier sold six CRJ1000ERs to Garuda in 2012 and simultaneously leased a number of similar jets. According to the ch-aviation fleets module, Garuda now has 18 of the regional jets in its fleet.

Bombardier told Yahoo Finance that no charges had been laid against the company or its employees in connection with this matter. “In accordance with best practices when such allegations come to our attention, we have launched an internal review conducted by external counsel and we are cooperating with the investigation opened by the UK Serious Fraud Office, which has contacted Bombardier further to the Indonesian judgments. We have no further update to provide at this time.”

On its website, Bombardier says its supplier code of conduct is based on "a strong commitment to corporate responsibility and sustainable business practices". As a signatory of the United Nations Global Compact (UNGC), the company says it is committed to actively promoting ten UNGC fundamental principles, which includes anti-corruption.

Garuda’s current chief executive officer, Irfan Setiaputra, said in a statement the airline would cooperate with the relevant authorities. This was echoed by Indonesia’s state-owned enterprises minister, Erick Thohir.

Bombardier is the latest aerospace group to face scrutiny over the use of middlemen after authorities struck a record bribery settlement with Airbus (AIB, Toulouse Blagnac) in January 2020 and a 2017 plea deal with the UK's Rolls-Royce. Both settlements involved sales of aircraft or engines to Garuda and airlines in other countries.

Airbus in February agreed to pay a record USD4 billion in fines after reaching a plea bargain with prosecutors in Britain, France, and the United States over alleged bribery and corruption stretching back at least 15 years. In 2017, Rolls-Royce agreed to pay more than USD800 million to defer charges following an investigation by the SFO and US Justice Department into alleged bribery of officials in six countries.

Under a system of deferred prosecution agreements available to the SFO, companies can be offered the chance to settle cases with a fine and escape corporate criminal charges by helping to investigate themselves and undergoing radical internal changes, Reuters reports.

In its latest move to stay afloat during COVID-19, Garuda meanwhile has terminated the contracts of around 700 workers who have been on furlough since May, the airline confirmed in a statement. The company said it had taken various actions to ensure its sustainability amid the pandemic, including taking on a IDR1 trillion rupiah (USD71 million) loan from Indonesian Eximbank, but its financial condition was yet to improve.