General Electric (GE -1.47%) wasn’t an investor favorite on Friday. The veteran industrials-and-more conglomerate had its share price dinged by 1.4% on the day, a slightly worse decline than the 1.1% slide suffered by the S&P 500 index. News of a regulator’s digging into its operations overseas was the catalyst for the decline.
Before market open, Reuters reported that financial regulatory authorities in France had conducted searches of General Electric’s facility in the eastern city of Belfort. Citing a response from deputy financial prosecutor Antoine Jocteur-Monrozier, the news agency added that this was done as part of a preliminary investigation into alleged money laundering and tax fraud.
The French official said that the probe is ongoing. It stems from a complaint from the workers’ council and unions at the facility. This alleged that General Electric transferred 555 million euros ($590 million) in profits from there to Switzerland or the US It was not clear how the industrial company apparently effected this.
Unions had accused General Electric of making such transfers to book paper losses for the facility as a way of justifying recent job cuts. At the moment, roughly 4,000 people work at the site.
Not surprisingly, General Electric has rejected the claims. It added that it obeys tax laws in every jurisdiction in which it has operations.
The company acquired the Belfort site in 2015 upon its acquisition of the power business of French engineering company Alstom. Previous to that, it had licensed Alstom to produce General Electric turbines at the facility.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.