Cement producer LafargeHolcim is under formal investigation in France over payoffs to militants in Syria.
The company said that the examining magistrates in Paris, presiding over the case relating to the operation of the Jalabiya cement plant in Syria by Lafarge Cement Syria between 2011 and 2014, decided to put the company Lafarge SA under investigation.
LafargeHolcim said the charges were expected, and it admitted that the system of supervision of its Syrian subsidiary did not allow the company to identify wrongdoings at the level of the subsidiary, which were the result of what it described as “an unprecedented violation of internal regulations and compliance rules by a small group of individuals who have left the group”.
But it added that it will appeal against those charges which do not fairly represent the responsibilities of Lafarge SA.
Beat Hess, chairman of the Board of LafargeHolcim, said: “We truly regret what has happened in the Syria subsidiary, and, after learning about it, took immediate and firm actions. None of the individuals put under investigation is today with the company.
“LafargeHolcim was formed in 2015 out of two proud champions, each with a tradition reaching back over 100 years. Prior to the merger the Lafarge Group had a comprehensive compliance programme which was breached. We have further strengthened the compliance program and culture since the merger, to make sure that similar mistakes will not happen again. I believe our compliance culture is strong through our entire Group and with our dedicated employees we will overcome individual wrongdoings.”
When LafargeHolcim became aware of the “irregularities” that occurred in Syria, its Board commissioned an investigation in 2016, which was undertaken by independent external legal advisers experienced in complex international investigations.
The main findings of this investigation were made public in April 2017, and revealed that the local company provided funds to third parties to work out arrangements with a number of armed groups, which included sanctioned parties.
“This report and more than 260,000 documents collected for the investigation were handed over to the French authorities and are essential to the case,” the company stated.
It added: “On several occasions, including today before the examining magistrates, the company confirmed that unacceptable individual errors were made in Syria until the site was evacuated in September 2014, which it firmly regrets. The company will continue to fully cooperate with the legal authorities in this case.”