News | 10/16/2017 Allegations in Connection with Business Operations in South Africa. Internal Investigation Closed. Involved Liebherr Entities and Employees not in Violation with any Applicable Laws or Regulations.

In an article published on July 17, 2017 a group of investigative South African journalists, Ama Bhungane, mentioned Liebherr Container Cranes Ltd., based in Killarney, Ireland in the context of an alleged kickback scheme related to supply contracts with Transnet and involving the sales agent Accurate Investments Ltd.

Liebherr considers these allegations as very serious. The business practices described in the article are unacceptable to us. The commitment to integrity of conduct and to fair competition in markets across the world is part of our core values.

In accordance with Group policies, the ultimate holding company of the Liebherr Group — Liebherr-International AG — therefore conducted an internal investigation into this matter. The results of this investigation show that the transactions under investigation were legally sound and not in violation of any applicable laws or regulations on the part of the Liebherr entities and employees involved.

The selection of a sales agent such as Accurate Investments Ltd. to provide interface services to the end user during the tender, procurement and supply process is a practice, which is common in the sales process for capital expenditure projects. It is also common that such a sales agent receives a nominal commission for the services provided in the event the tender, procurement and supply process is successfully completed.

In the case in question, Accurate Investments Ltd. was the sales representative selected by Liebherr Container Cranes Ltd. As required by the Group’s due diligence process, Liebherr Container Cranes Ltd. performed background checks prior to entering into the agency agreement with Accurate Investments Ltd. These background checks did not indicate any malpractice on the part of Accurate Investments Ltd.

The internal investigation report did observe, however, that the Group’s defined due diligence process might have been implemented in a more stringent manner in this case by pushing the performed background checks to an even higher level than the ones actually performed.

Being aware of the increased risks associated when agents are included in any type of transaction, Group companies, management and employees must strive to insure that the Group’s standards of scrutiny and diligence are complied with in day-to-day business.

Liebherr’s code of conduct and internal regulations governing Compliance can be found on https://www.liebherr.com/en/deu/about-liebherr/company-profile/compliance/compliance.html