British construction company to pay £6.55m in connection with overseas bribery offenses, as the SFO asks UK corporates to self-report corruption issues

Author:Mr Andrew Legg, Angela Hayes and Susan Rosser
Profession:Mayer Brown
 
FREE EXCERPT

Originally published September 25, 2009

Keywords: Overseas bribery offenses, SFO,

corruption, Mabey & Johnson Ltd, illicit payments, criminal

charges, Foreign Corrupt Practices Act, FCPA

Mabey & Johnson Ltd, a British company which manufactures

bridge equipment, pleaded guilty at Southwark Crown Court to a

series of corruption offenses committed overseas and is to pay a

total of £6.55m in connection with these offenses. On Friday

September 25, 2009 the company was ordered by the court to pay

£4.6m in fines and disgorgement of profits. In addition, the

company has undertaken to pay reparations to the affected

countries. It will also pay legal costs and the costs of an

independent compliance monitor to ensure it has appropriate systems

and controls in place going forward.

The company admitted that between 1994 and 2001 it bribed public

officials over a bridge and road project in Ghana and another

building contract in Jamaica. The company also admitted a separate

charge of making €422,000 of illicit payments to Saddam

Hussein's Iraqi regime between 2001 and 2002.

The court stressed that the fact that the company had

self-reported the problem to the SFO and then cooperated fully in

the investigation was the biggest mitigating factor in assessing

the level of fine to be imposed.

It is not yet known whether the SFO will bring criminal charges

against individual former directors of the company, but today's

court ruling does not preclude them from doing so.

This is the first prosecution by the SFO of a British company

for overseas corruption. It should be seen in the context of the

current drive by enforcement agencies, including the SFO, the City

of London Police Overseas Anti-Corruption Unit and the Financial

Services Authority, to be seen to be taking action against those

who engage in bribery as a method of winning foreign contracts.

The SFO wants companies to self-report

The decision voluntarily to disclose the corruption offenses to

the SFO was taken by the management of Mabey & Johnson's

holding company in February 2008 whereupon an investigation was

opened.

SFO Director Richard Alderman said, "These are serious

offenses and it is significant that Mabey & Johnson has

cooperated with us to get to this landmark point. This has enabled

this case to be dealt with in just over a year and is a model for

other companies who want to self report corruption and have it

dealt with quickly and fairly by the SFO."

The SFO is looking to encourage...

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