French defense and technology company Thales has denied allegations of bribery and corruption brought to its attention after Britain’s Serious Fraud Office (SFO) announced a joint investigation with French authorities.

Thales said on Friday that the Anglo-French investigation concerned “the performance of a contract in Asia” and focused on four “units in France and the UK”, without giving further details.

“Thales denies the allegations brought to its attention,” the company said in a statement.

It did not provide further details about the allegations or when it first learned of them and how. It also did not say whether it was conducting its own internal investigation.

The company said in a recent corporate report that it had “zero tolerance” for corruption.

In October, Thales won a lucrative contract to build an Australian plant for the production of artillery shells.

The deal followed months of controversy surrounding one of its employees being accused of soliciting champagne and passing secrets to the company from 2016 to 2017 while previously employed by Australian Defence.

A Thales spokesperson said the company cooperated with authorities in the recent Anglo-French investigation and always complied with national and international laws.

A French judicial source previously told Reuters the investigation was related to an arms contract in Asia and centered on possible allegations of bribery of a foreign public official, influence on human trafficking, handling of stolen goods and money laundering.

Two people familiar with the case said it involved, at least in part, a business deal in Indonesia.

Indonesia’s defense ministry told Reuters in a statement late on Saturday that it was aware of news of the investigation.

A spokesman for the ministry said that all Thales contracts with the ministry and the country’s defense industry followed rules on transparency, accountability and good governance, and that the ministry had seen no signs that these contracts violated any law.

The SFO declined any comment beyond late Thursday’s announcement.

“At this time, the related contract under investigation remains unknown, making any potential assessment of the risk challenging,” Jefferies analysts said in a note.

Thales was privatized in the late 1990s and is effectively controlled by the French government and aircraft manufacturer Dassault Aviation, which together hold a majority.

Thales’ military and civilian products range from sub-hunting sonar to biometric identity systems for banks and from satellites to back support systems for airlines.

It also provides cyber security services and radars for French Rafale fighter jets and is involved in two satellite ventures with Italian aerospace group Leonardo.

It has 16 sites in the UK, employing more than 7,000 people. In September, it said its local CEO had expressed his desire to leave the group with a replacement taking office this month, without giving further details.

Latest survey separate from June raids

The latest probe appears to come on top of two previous probes by France’s PNF financial prosecutor, as well as an ongoing probe inherited from the 2019 acquisition of chip maker and digital security firm Gemalto.

In June, searches were conducted at sites in France, the Netherlands and Spain as part of two preliminary investigations by France’s PNF, Thales said in its half-year results, adding that it was cooperating with those probes.

The French judicial source said the latest investigation was separate from raids carried out in June.

The company has also faced controversy in Australia.

In June, an Australian National Audit Office (ANAO) report detailed “unethical conduct” involving a ten-year contract for Thales to run two Commonwealth munitions facilities, prompting the Department of Defense to refer the matter to the corruption watchdog.

In early November, defense officials confirmed in Senate Estimates that the NACC was still investigating the Thales matter, after Defense Industry Secretary Pat Conroy had declared that his department had found no evidence to support the claims.

Former Defense Secretary Linda Reynolds, who served in the role between 2019 and 2021, said she had taken an intense interest in the ANAO’s scathing findings earlier this year about probity in the department.

“When I read this audit report and remembered what had actually come to me in the (ministerial) brief, I was almost sickened by what I was told, and it is very much in line with the advice contained in this report on what happened to another minister in 2017,” Senator Reynolds had said.

“In fact, you’re now issuing new contracts to the same company (Thales), so that’s why this is so important, I think, to your organization, because you’ve inherited a smell, a big smell.”

Reuters/ABC