Bombardier Statement on Azerbaijan Project

We can confirm that Bombardier received a show-cause letter from the World Bank’s Vice President for Integrity, as part of the World Bank’s audit related to a 2013 rail signalling contract in Azerbaijan, awarded to a Bombardier-led consortium. This matter has already been disclosed by the Company for more than two years and, as indicated in its public disclosure, the Company has launched an internal review.

Bombardier was invited to respond to these preliminary findings and has done so. As the World Bank’s audit process is governed by strict confidentiality requirements, we can only reiterate that we strongly disagree with the allegations and preliminary conclusions contained in the letter.

However, it must be kept in mind that the show-cause letter does not represent formal accusations, but rather sets forth the World Bank’s preliminary findings about the various matters and allegations previously identified in its “Interim Referral Report to the Government of Sweden” issued at the outset of its audit and rendered public by the Swedish prosecutor. As such, the content of the show cause letter is a preliminary one-sided account and is part of a routine posture in any adversarial setting. Obviously, initial assumptions in any investigatory proceeding can reflect badly on the party under scrutiny until the allegations have been fully tested and addressed by a complete and fair response. This is particularly true here when we consider that certain allegations, central to the show-cause letter, have already been judicially tested and adjudicated upon in a Swedish court proceeding last year, where a former Bombardier employee involved in the Azerbaijan contract was acquitted by a unanimous panel on all charges, including those alleging bribery and making improper payments.

It is also important to remember that the World Bank was intimately involved in the bid evaluations for this project, and had previously issued a written “no-objection” letter by which it accepted the bid process and structure it now finds objectionable. As part of the ongoing audit process, we have repeatedly asked the World Bank to provide us with the information and documents they believe support their allegations, including emails from or interviews with non-company witnesses. To date, nothing has been provided.

We strongly disagree with the World Bank’s comments and allegations that the Company engaged in delaying practices or any sort of obstructive behavior. This is simply not true. The company and those engaged to assist it always fully cooperated with the audit to the extent possible and in the respect of everyone’s rights to a fair and legal treatment along the process. Therefore, despite the way these preliminary allegations are being aired, the Company will continue to fully respect and cooperate with the World Bank’s audit. Finally, it should be noted that World Bank financed contracts represent less than 1% of Bombardier Transportation’s business.