I don't know how you feel, but the rather complex charges against Alcoa
How so? There's a Dow 30-sized company, an oil-rich Persian Gulf country trying to expand its industrial base beyond energy, charges of bribery and overpayments for alumina, and supposed international middleman. Next, throw in secretive companies based in Singapore, Switzerland, and the Isle of Guernsey, and (for added authenticity) a couple of well-known Western banks, Royal Bank of Canada
If you're confused, you just need to know that, within the past couple of days, a Bahrain-based company, commonly known as Alba, has filed suit in U.S. court in Pittsburgh, accusing Alcoa of bribing officials over the course of a decade and a half, and using overseas shell companies to secure millions in overpayments. The overpayments allegedly involved inflated prices for alumina, a precursor in the manufacture of aluminum.
Because Alcoa was reportedly given only a couple of weeks to respond to allegations by Alba before the suit was filed, the American company has thus far conducted only a hurried investigation of the charges. It maintains it hasn't turned up any evidence of wrongdoing.
It seems to me that the biggest danger here to Alcoa, the world's third-largest aluminum producer, behind London-based Rio Tinto
My inclination is not to judge Alcoa until it's been clearly found to have transgressed. That apparently is the market's approach, since the company's shares were up slightly on Thursday, amid a drop-off Dow Jones Industrial Average, which includes Alcoa.
Now, if you'll excuse me, I'm eager to begin writing my novel.
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