Thales, Europe’s largest defence technology firm, said the probe by the SFO and France’s PNF financial prosecutor concerned a contract in Asia and focused on four entities in France and the UK, without giving further details.
“Thales denies the allegations brought to its knowledge,” the company said in a statement.
It did not give any further details of the allegations or say when it first learned of them, or how. It also did not say whether it was conducting its own internal probe. The company said in a recent corporate report that it has “zero tolerance” of corruption.
Shares in partially state-owned Thales fell as much as 7% but recovered most of the losses to end the day down 2.9%.
A Thales spokesperson said the company was cooperating with the authorities in the investigation and always complied with national and international laws.
A French judicial source told Reuters earlier that the probe related to an arms contract in Asia, centred on possible charges of bribery of a foreign public official, influence trafficking, handling stolen goods and money laundering.
Two people familiar with the case said it at least partially involved a business deal in Indonesia.
Indonesia’s defence ministry told Reuters in a message late on Saturday that it was aware of news of the investigation. A ministry spokesman said all Thales contracts with the ministry and the country’s defence industry follow rules of transparency, accountability and good governance, and the ministry has not seen any indication of those contracts breaking any law.
The SFO declined any comment beyond its late Thursday announcement.
“At this point, the related contract under investigation remains unknown, making any potential assessment of the risk challenging,” Jefferies analysts said in a note.
Thales’ military and civil products range from sub-hunting sonars to biometric identity systems for banks, and from satellites to seat-back entertainment systems for airlines.
It also provides cybersecurity services, radar for French Rafale warplanes and is involved in two satellite ventures with Italian aerospace group Leonardo.
It has 16 sites in Britain, with more than 7,000 staff. In September, it said its local CEO had expressed his wish to leave the group with a replacement taking office this month, without giving further details.
June raids
The latest investigation appears to come on top of two earlier probes by France’s PNF as well as an ongoing investigation inherited from the acquisition of chipmaker and digital security firm Gemalto in 2019.
In June, searches were carried out at sites in France, the Netherlands and Spain as part of two preliminary investigations by France’s PNF, Thales said in its mid-year results, adding that it was co-operating with those probes. It also said it was not aware at that time of any other pending cases.
The French judicial source said the latest investigation was separate from the raids carried out in June.
The joint Anglo-French probe is the most high-profile corporate investigation between the two countries since a multinational probe into European planemaker Airbus.
Airbus reached a trio of deferred prosecution agreements in January 2020 and agreed to pay record fines totalling €3.6 billion (US$3.74 billion) following investigations in Britain, France and the US relating to a global network of intermediaries run mainly on behalf of its jetliner division.
Privatised in the late 1990s, Thales is effectively controlled by the French government and planemaker Dassault Aviation which together hold a majority.
Shares in Dassault fell 1.9%.
The French economy ministry did not immediately reply to a Reuters request for comment.