Alstom's
general meeting at the end of June addressed all sensitive subjects concerning
the company and its practices over more than ten years, and more precisely,
during the period when Patrick Kron managed it. The Sherpa Association
published a long and detailed report repeating the grievances of the American
courts concerning recognised cases of corruption, Alstom having pleaded guilty
and been fined $772 million.
Even
though this decision by the American courts may appear
"remote-controlled", as it may have appeared for BNP PARIBAS, it is
clear that the acts of corruption of which it is accused did exist and are
stirring up trouble concerning the methods used by Alstom (as well as numerous
companies…) to win contracts in their countries or for export. Eight years ago,
several investors from English-speaking countries already expressed their
concerns to Alstom's general management about events concerning Sudan, but
unsuccessfully at the time…
During
the General Meeting, Patrick Kron stated that he had an obligation for
discretion, given the agreements made with the American courts, which would
explain why he cannot publicly defend himself… But the question, the only
question, which arises from these investigations and this conviction is simply:
who is responsible?
In
other cultures, particularly Asian, the boss duly notes the accusations and
resigns, taking responsibility for the failure. In France, the boss rarely
resigns and Patrick Kron has said that he does not intend to resign for this
event or waive his severance bonuses.
But
who is responsible? The employees who were imprisoned in the USA, the senior
managers, the directors? In the case of Alstom (as in many other cases), no
one! Of course, our position does not target the man himself, as Patrick
Kron must have values and an ethic that he has tried to gradually put in place
at Alstom. But it does call upon the manager, the person who is the boss, to
fully accept his responsibility as manager and resign to allow the organisation
to continue within a different framework.
These
cases of corruption have certainly destabilised the general management and the Board
of Directors, which may come to reflect on the appropriateness of selling 75%
of the business to General Electric and the configuration of the new
railway-only Alstom, in a segment where there are numerous competitors and few
orders in Europe.
At
a time when we are wondering about the acquisitions of our finest industrial
assets by foreign companies, strategic errors and management faults are advance
indicators of the poor health of a company, and the company, its employees and
its shareholders will one day pay the price.
We
have requested Mr Patrick Kron assume his responsibilities by refusing his
severance payment. He did not do so and he agreed to be reappointed as a
director of the new Alstom. It is a great pity because it tarnishes the image
of the company manager a little more amongst employees, shareholders and the
French, who do not understand why the manager, when he has failed, does not
feel responsible.
Olivier de Guerre
PhiTrust Active Investors
