World Bank Group Announces Settlement with Africa Railways Logistics Limited (ARLL) and two other companies in Kenya

Stocks and Financial Services Press Releases Tuesday April 17, 2018 12:32
WASHINGTON--17 Apr--World Bank

WASHINGTON, April 16, 2018 — The World Bank Group today announced the debarment of Africa Railways Logistics Limited (ARLL) for two years in connection with an employee's attempt to improperly influence the customs and port clearance process for locomotives that were part of two investment projects by the International Finance Corporation (IFC), the private-sector arm of the World Bank Group. This is the World Bank Group's first debarment related to an IFC investment.

The debarment makes ARLL ineligible to participate in World Bank Group-financed projects. It is part of a settlement agreement, under which the company acknowledges responsibility for the underlying sanctionable practices and agrees to meet specified corporate compliance conditions as a condition for release from debarment.

Two related companies – Africa Railways Limited (ARL) and Rift Valley Railways Kenya Limited (RVRK) – were sanctioned with conditional non-debarment, which means that they remain eligible to participate in World Bank Group-financed projects as long as they comply with their obligations under the settlement agreement. Otherwise, the conditional non-debarment will convert to a sanction of debarment with conditional release, and the companies then will become ineligible to participate in World Bank-financed projects until the conditions for release set out in the settlement agreement are met.

The IFC investments (Project No. 31102 and Project No. 24766) included a loan to purchase locomotives, wagons, infrastructure, and cover other costs associated with railway concessions in Kenya and Uganda. According to the facts described in the settlement agreement, an employee of RVRK, who also owned a subcontracted company, both failed to disclose his ownership interest in the company and attempted to improperly influence the customs and port clearance process for the locomotives, which is a corrupt practice. The employee was disciplined and subsequently terminated.

The settlement agreement provides for a reduced period of debarment in light of the companies' cooperation and voluntary remedial actions. As a condition for release from sanction under the terms of the settlement agreement, all three companies commit to develop an integrity compliance program consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. They also commit to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.

The debarment of ARLL qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.

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