A construction cartel has allegedly bilked energy utilities and industrial corporations in Germany for years.
The Munich Public Prosecutor’s Office and German Federal Cartel Office are investigating nine companies suspected of illegal price fixing, issuing fictitious invoices for work never performed and at least one case of paying bribes with funds from an undeclared construction account.
According to the allegations, eight German and a Dutch building equipment supplier are at the heart of the investigation, which focuses on alleged harm to 20 companies, including German utilities RWE and E.ON. The alleged fraud involved about 50 major building projects, with an estimated order volume of several hundred million euros, and caused financial losses that have yet to be quantified.
Global corporations including E.ON and RWE, Alstom of France and Hitachi of Japan were among those allegedly victimized by the cartel. Volkswagen subsidiary Audi was reportedly conned during construction of an building at its headquarters in Ingolstadt.
Electronics giant Siemens, one of Germany’s largest private employers, was apparently the biggest victim.
A warrant issued by Munich prosecutors targeted five building suppliers: Caverion, an offshoot of Finnish construction YIT Corporation; Cofely, a unit of French building group GDF Suez; two German firms, Ferrostaal Air Technology and Kraftanlagen München and Nickel, a unit of the French Vinci unit. Others under scrutiny of prosecutors include Imtech, a Dutch firm, and three other German building suppliers: Rixner Lüftung-Klima, Julius Gaiser and Siegle + Epple.
“Starting in 2007, Caverion, Cofely, Ferrostaal Air Technology, Kraftanlagen München and Nickel joined forces to form a fixed group of company,” reads the search warrant issued by the Munich Public Prosecutor’s Office.
According to the document, the five companies named in the warrant “entered into anti-competitive agreements in the context of major construction projects, to the detriment of Siemens AG.”