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US: Hawaii ironworkers' pension fund sues Alcoa, board members over Bahrain bribery allegations

The Associated Press
May 8th, 2008

PITTSBURGH: An ironworkers' pension fund has sued aluminum maker Alcoa Inc. and its board of directors over a purported scheme to bribe officials in the Persian Gulf country of Bahrain.

The lawsuit filed Tuesday in U.S. District Court in Pittsburgh comes after a judge in March temporarily halted a civil lawsuit against the company to allow federal investigators to conduct a criminal probe.

The Hawaii Structural Ironworkers Pension Trust Fund accuses Alcoa's board in the lawsuit of "causing and/or failing to prevent Alcoa's illegal payment of hundreds of millions of dollars in illegal bribe payments" to senior Bahraini government officials.

The Pittsburgh-based company's officers and directors "repeatedly misrepresented how they were overseeing, managing and operating Alcoa in a lawful and ethical manner," the pension fund said in its lawsuit, according to court documents.
Kevin Lowery, an Alcoa spokesman, said he had not had a chance to thoroughly review the latest lawsuit, but that Alcoa's position on the earlier allegations by Alba had not changed.

"We have looked into this and we haven't seen any instances of wrongdoing by our employees at all," he said, adding that Alcoa was cooperating with Justice Department investigators looking into the bribery claims.

The ironworkers' pension fund, which owns Alcoa shares, is seeking unspecified damages for financial losses incurred by the alleged bribery. It also wants reforms intended to broaden shareholder rights and tighten the company's governance and accounting practices.

The size of the fund's stake in Alcoa was not immediately known.

The bribery allegations first surfaced in February, when a company controlled by the Bahrain government, Aluminum Bahrain B.S.C. or Alba, filed a civil lawsuit against Alcoa and affiliates, seeking more than $1 billion (65 0million) in damages.

The Bahraini company accused Alcoa, the world's third-largest aluminum producer, of bribing officials through overseas shell companies to secure hundreds of millions of dollars in overpayments over a 15-year period starting in 1993.

Alba operates one of the world's largest aluminum smelters and has been an Alcoa customer for roughly three decades. It buys most of its alumina - a material used to make aluminum - from Alcoa.

The pension fund, which oversees the retirement savings of ironworkers in Hawaii, has accused Alcoa and its directors of breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment.

The lawsuit precedes Alcoa's annual meeting, which is scheduled for Thursday afternoon in Pittsburgh.

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