Thales Under Investigation for Corruption Allegations

The UK’s Serious Fraud Office (SFO) and France’s Parquet National Financier (PNF) have launched investigations into suspected corruption and bribery involving the French defense giant Thales. The allegations center on potential misconduct linked to a contract in Asia. Thales, while confirming the investigations, has denied any criminal activity.

Raids Conducted Across Multiple Locations

Last week, authorities carried out searches at four Thales facilities in France and the UK. These operations are part of the broader investigation into the alleged contract irregularities. In June, French authorities conducted similar searches at Thales sites in France, the Netherlands, and Spain. While the June raids were confirmed in Thales’ half-year report, the company stated it was cooperating with the PNF and claimed no knowledge of other ongoing investigations.

A History of Legal Scrutiny

Thales has been under the microscope for several years:

• 2019 Investigation: The PNF began probing Thales’ majority acquisition of Gemalto, a cybersecurity and chip production firm, for potential irregularities.
• June 2023 Raids: Authorities searched Thales locations across three countries, but the recent raids are reportedly unrelated to those incidents.
• Wider Context: Allegations of unethical practices have long dogged Thales, Europe’s largest defense contractor, leading to repeated investigations by national and international bodies.

Financial Impact and Market Reaction

The ongoing investigations have already affected Thales’ market position. Following the announcement, Thales shares dropped by as much as 7%, reflecting investor concerns over potential reputational and financial repercussions.

Statement from Authorities

Nick Ephgrave, Director of the SFO, underscored the significance of international collaboration in tackling corruption, stating:

“The collaboration with our international partners is crucial in fighting global corruption. This case strengthens the longstanding relationship between the SFO and the PNF, built on mutual cooperation and shared successes.”

Thales’ Response

Thales has consistently denied any involvement in criminal activities. It has reaffirmed its commitment to cooperating with authorities during these investigations. Despite its denials, the mounting legal scrutiny has added pressure on the company as it seeks to maintain its standing in the defense industry.