Courts File Case Against São Paulo Trains Cartel; Siemens Accused

03/23/2015 - 10h20

A São Paulo court has filed a civil public action against eleven companies accused of forming a cartel to obtain contracts with the São Paulo Metropolitan Train Company (CPTM, in its Portuguese abbreviation).

The CPTM, which operates passenger trains in the state of São Paulo, has also been accused of involvement.

One of the companies involved is the German multinational Siemens. In 2013, as part of a leniency deal, the company agreed to cooperate with the Administrative Council of Economic Defense (CADE) and admitted the existence of the cartel.

In addition, Siemens agreed to reveal how the scheme operated in São Paulo and Brasília between 1998 and 2008.

The Public Prosecutor wants the contracts to be annulled, with the values involved being returned to the state, plus 30% as compensation for damages. In total, the fee is around US$130 million.

The lawsuit concerns the period between 2002 and 2007, when the state was governed by Geraldo Alckmin - who is the current state governor, having returned to office in 2011 - and Claúdio Lembo.

For the prosecutor Marcelo Milani, one of those who signed the initial request accepted by the São Paulo courts, Siemens' leniency agreement applies only in the administrative area and will not prevent the company being punished in the case proposed.

"Siemens employees admitted there was a cartel," Milani said to Folha. He believes that evidence and testimony provided by the company in the agreement with CADE can be used by the Public Prosecutor in order to shut down their operations.

CPTM said it would wait for the court's decision. Siemens has said on several occasions that the results of its internal audit provided the basis for the investigation and that the company has "always desired" clarification of the issue.

The companies Alstom, Bombardier, the Spanish company CAF (along with its Brazilian office), Mitsui, Temoinsa, Tejofran, MPE, TTrans and MGE have also been accused in the case.

Alstom and Ttrans have denied any involvement in illicit dealings. Folha was unable to contact Temoinsa, while the other companies declined to comment in the past.

Translated by TOM GATEHOUSE

Read the article in the original language