Skanska CEO says Argentina scandal smears co. name

BUENOS AIRES, May 30 (Reuters) - The head of Nordic builder Skanska SKAb.ST said a scandal involving the company over possible bribes on an Argentine pipeline project has been devastating for its image, local media reported on Wednesday.

Chief Executive Stuart Graham said “seven bad guys” were linked to about $5.5 million in overbilling on the natural gas project, which two Argentine judges are investigating on possible tax evasion and bribery charges.

Last year, the Swedish construction firm fired seven executives at its Argentine unit after discovering fake receipts in an internal audit -- a move that triggered judicial action.

“We know that 17 million pesos ($5.5 million) were charged for services never rendered to Skanska. We don’t know where that money went, and I don’t think the courts know either,” Graham told leading daily La Nacion newspaper.

“We may suspect, as you do, that the money was for bribes, but we don’t have proof of that,” Graham was quoted as saying in translated remarks.

The scandal has become a political liability for President Nestor Kirchner, who admitted for the first time last week that government officials could have been involved.

This month, a federal public works official resigned after being linked to the widening bribery probe, and the government fired two other officials under investigation.

At least two former Skanska employees are being detained while the investigation continues.

“You can imagine how devastating this situation in Argentina is for us. A small group of people deviated from our procedures and that is hurting our name,” Graham told Clarin newspaper during a brief visit to Buenos Aires. ($1 = 3.11 Argentine pesos)