The French multinational retail group confirmed the use of the lie detector devices at its Russian subsidiary, after it was shaken by a corruption scandal earlier this year. The anti-corruption lawyer in charge of investigating the matter was dismissed from the company after being brutally attacked.

No this is not a plot out of some KGB or FBI movie.

French distributor Auchan has actually started using lie detectors this year at its Russian subsidiary as part of its anti-corruption efforts. Auchan’s boss in Russia, Johannes Tholey, confirmed the information from French newspaper Les Echos. “We use it in a very decent way, not systemically, it is very strictly regulated and is only used within the framework of internal investigations for suspicions of corruption“.

Apparently this is even ” in full agreement with the Auchan ethics committee “. As per Tholey, the aim of this unusual measure is the implementation of the new French anticorruption law Sapin II (although nothing in the law seems to suggest going to this extent).

In Russia, the corruption is an omnipresent subject in commerce, at Auchan it was unfortunately quite massiveWe only use (lie detectors, editor’s note) when there is already suspicion, when we do not understand why employees have made decisions that go against the good of the company, ” added Tholey.

These devices, used a hundred times since the start of their installation in May, work with ” impressive precision ,” said Tholey, ensuring that in some cases the result is ” clearly green ” and allows ‘to rule out suspicions of corruption. ” For me, it was a very difficult decision,  it is not a criterion which leads to the dismissal, it is simply one of the instruments which we use within the framework of the problem: corruption at Auchan ”.

In Russia, the use of lie detectors is reportedly common in the industry. 

Since his appointment in November 2019, Johannes Tholey, current Managing Director of Auchan Russia, has made the fight against corruption his number one priority, as he informed the Russian RBC newspaper.

Indeed, at his initiative this year, an ethics committee was founded in charge of monitoring compliance at the company. Since then, around 60 Auchan employees have been dismissed, accused of misconduct.

The Corruption Schemes

Earlier this year, an investigation by Les Echos revealed a large-scale corruption within the group in Russia. Between 80 and 100 million euros, or 2-3% of its turnover in Russia, are siphoned off every year “due to corruption schemes introduced by the company’s management, said Alexeï Jarkov.

Jarkov, a certified anti-corruption lawyer, at the invitation of former Auchan Russia Managing Director, François Remy , had been investigating the company’s purchases since mid-2018.

“I had identified one of the five large suppliers of cold meats serving as a front company for one of the corruption schemes,” Jarkov said. The Moscow region investigative committee for criminal matters has launched a judicial investigation.

Jarkov identified the corruption mechanisms as follows: “purchasing managers are participating to corruption through rigged calls for tenders, sham price increases, favors for the promotion of products and other irregularities in the quality department and financial control, particularly in compliance”. He cited, as an example, the case of Auchan own-brand products: “100 of the 450 suppliers represent 80% of sales. For half of them, there is corruption”.

After noticing that some purchasing managers were keeping expensive suppliers, he proposed to diversify the sources of supply in order to introduce competition and transparency. His proposal was rejected. 

The dismissal

For Jarkov, who was beaten with an iron bar over the head, there is no doubt: his attackers wanted to eliminate him because his work “caused a lot of inconvenience”, he explained to Les Echos. He suspects one of the five corruption networks he discovered to be behind his assault.

After the attack and six weeks in hospital, Jarkov learned in October his contract was not being renewed. “I was sidelined because I had discovered the matter,” said the lawyer.  As for the former MD, François Remy to whom he reported the results of his investigations, he was also dismissed.

The lawyer was certainly lucky to have escaped alive. But this whole saga is just another reminder that anti-corruption compliance could be risky business in certain countries.

As for the use of the lie detectors, does the end justify the means?

The Compliance Lady BRIBERY, CORPORATE CORRUPTION, Corruption, SAPIN II

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