Fraudulent Activities in Finance Exposed in Madagascar

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The World Bank Group has announced a two-year debarment of Madagascar-based Colas Madagascar S.A., a construction company, due to its involvement in collusive and fraudulent practices related to the Airports Madagascar Project. The institution’s Integrity Vice Presidency conducted an investigation that revealed the company’s wrongdoing, which was part of the project financed by the International Finance Corporation (IFC).

Investigation Reveals Collusive Practices

According to the facts of the case, Colas Madagascar S.A. engaged in collusive practices by arranging for improper meetings with government officials between February 4, 2015 and May 4, 2015 during the tender for the concession contract to run the airports. The company also committed a fraudulent practice by failing to disclose these meetings to the IFC.

Settlement Agreement Reached

As part of a settlement agreement, Colas Madagascar S.A. has acknowledged responsibility for its actions and agreed to meet specific corporate compliance conditions as a condition for release from debarment. The company’s non-sanctioned parent company, Colas S.A., has also committed to adapt its group-wide corporate integrity compliance program to reflect the principles set out in the World Bank Group Integrity Compliance Guidelines.

Consequences of Debarment

The debarment makes Colas Madagascar S.A. and its subsidiary, CMBI SNC, ineligible to participate in projects and operations financed by institutions of the World Bank Group. The company has agreed to implement and maintain this program as part of its business operations going forward, including at CMBI SNC. Colas Madagascar S.A. has also committed to continue fully cooperating with the World Bank Group Integrity Vice Presidency.

Promoting High Integrity Standards

This move is seen as a major step in promoting high integrity standards in international finance and demonstrates how settlement agreements can be used to promote better business practices by companies engaged in private sector development projects.

Cross-Debarment Eligibility

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