March 22, 2019 / 5:50 PM / a month ago

UPDATE 1-African Development Bank, GE reach settlement on Alstom misconduct

(Adds details, comment from GE and African Development Bank Group)

March 22 (Reuters) - The African Development Bank Group said on Friday that two General Electric Co subsidiaries would be temporarily barred from bidding on power contracts as part of a settlement of misconduct cases.

The agreement bars GE Power units in Egypt and Germany from bidding for up to 76 months, the bank said. The units, former parts of Alstom that GE acquired in 2015, were found to have engaged in bribery and fraud in 2006 and 2011, the bank said.

"This conduct happened long before GE acquired Alstom's power business and we cooperated fully with the investigation," GE said in a statement. "Ethical behavior and compliance are foundational to GE's ability to successfully operate in more than 180 markets around the world."

Other development banks may also enforce the bans, the bank said. "We have no reason whatsoever to doubt that the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group will follow the African Development Bank's lead," Johann Benohr, a senior advisor to the director of the office of integrity and anti-corruption at the African Development Bank Group, said in an email to Reuters.

The barred entities are Alstom Egypt for Power Projects S.A.E., based in Cairo, and GE Power Systems GmbH, based in Mannheim, Germany, the bank said.

GE is trying to restore profits at its money-losing power business as the conglomerate slims down to three main product lines: power plants, jet engines and wind turbines. (Reporting by Alwyn Scott; editing by Diane Craft)

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