Koninklijke Philips NV (EU:PHIA)
Historical Stock Chart
2 Years : From Nov 2017 to Nov 2019
By Samantha Pearson
SÃO PAULO -- Brazilian police arrested the head of General Electric in Latin America on Wednesday as part of an investigation into a group of companies accused of siphoning off cash from public health contracts in Rio de Janeiro for the past two decades.
Prosecutors accused Daurio Speranzini Jr. of taking part in the cartel when he worked for Philips Medical Systems, before joining General Electric. A Rio de Janeiro court also issued arrest warrants for another 21 people as part of "Operation Resonance," the latest in a series of sprawling corruption probes that have ensnared the upper echelons of Brazilian business and politics.
Prosecutors said search warrants had been issued for 44 addresses, and assets worth a total of $307 million had been frozen as part of the investigation into the suspected cartel, which they believe was in operation between 1996 and 2017.
Prosecutors allege the cartel was set up to fix prices for medical equipment tenders in the state of Rio and involved at least 33 companies, although some of these were merely front companies, they said.
Philips said that it was cooperating with the authorities, adding that members of the company's current executive management weren't part of the probe.
In a statement Wednesday, General Electric said that the allegations against its Latin America head related to a period during which he didn't work for the company, adding that GE was committed to "integrity, compliance, and the rule of law."
Mr. Speranzini couldn't be reached for comment.
Wednesday's moves come as Brazilian authorities investigate offshoots of the country's vast "Car Wash" probe that has already sent scores of top business figures and politicians to prison, including former President Luis Inácio Lula da Silva.
This week, Eike Batista, once Brazil's wealthiest man, was sentenced to 30 years in prison after being convicted of bribing Rio de Janeiro's former state governor. Mr. Batista's lawyer said he planned to appeal the conviction.
Write to Samantha Pearson at email@example.com
(END) Dow Jones Newswires
July 04, 2018 21:24 ET (01:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.