LafargeHolcim’s Syria investigation reveals “significant errors of judgement”

Listen to this article

00:00
00:00

LafargeHolcim, the Swiss-French cement company, has admitted it cannot be sure about the ultimate recipient of payments made to allow operations to continue at Syrian plant before it was evacuated in September 2014.


An internal investigation into allegations staff had dealt with local armed groups and sanctioned parties had revealed “significant errors of judgement” and measures that were “unacceptable,” LafargeHolcim said on Thursday.

The revelations came as the company reported an 8.7 per cent rise to €5.8bn in like-for-like adjusted operating pre-tax earnings – in line with guidance last November of a “high single digit” increase. LafargeHolcim was created in 2015 through the merger of France’s Lafarge and Switzerland’s Holcim,

LafargeHolcim said criminal complaints were reported to have been filed in France in connection with its reported activities in Syria. It said the group had not been made party to any proceedings, but said there was “no indication that the reported allegations are likely to have an adverse financial impact that is material to the group”.

Internal procedures had been tightened, the company added, including by creating an ethics, integrity and risk committee supervised by an senior executive.

LafargeHolcim said armed factions had controlled areas around the Syrian plant:

It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged.

Separately, LafargeHolcim announced that Bruno Lafont would step down as co-chairman at the annual meeting in May. Mr Lafont was chief executive at Lafarge – and was originally expected to lead the combined group.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.