Fraud allegations emerge at Deutsche Bahn railway project
Allegations of fraud dating back to 2016 have now emerged and involve German railway giant Deutsche Bahn, which from 2010 owns UK-based bus company Arriva.
A couple of employees alleged at the time that senior staff misused corporate funds and participated in a fraud scheme while working on a new underground railway station in Stuttgart, a Financial Times investigation discovered.
One of the whistleblower was fired while Deutsche Bahn investigated into the allegations, prompting the other – an engineer who joined the state-owned company in 1997 – to break contact.
The sources accused the project’s senior management of having increased costs by €600m by commissioning unneeded work, for which they were thought to have received payoffs. From an initial total cost of €2.5bn, costs have gone up to €8.2bn, with forecasts expecting it to increase to €10bn.
According to the paper, the whistleblowers – after noticing that redundant work was being awarded and contracts were unnecessarily too expensive – flagged it to superiors but after being dismissed, they started to believe management was part of the scheme.
The company launched an internal investigation that same year but claimed to have not find any irregularities. “All alleged irregularities were investigated by the unit for internal investigations and evaluated by group security and did not prove to be true,” the company said.
Frequently under fire for its poor service and infrastructure, Deutsche Bahn reported in 2020 a loss of €5.7bn and a €37bn net debt.
City PM has approached Deutsche Bahn for comment.