SFO sets precedent with M&J prosecution Daily Telegraph

Published on 11 Jul 2009 under category: article

By Dan Hyde, Consultant at Cubism Law

As published in the Daily Telegraph – 11 July 2009 p33

Mabey & Johnson corruption case may lead to more investigations

A BRITISH bridge construction company has made legal history by admitting in court it was involved in overseas corruption and the breach of United Nations sanctions.

The Serious Fraud Office´s successful prosecution could now lead to it pursue other companies suspected of committing fraud overseas, legal experts have said.

Mabey & Johnson, based in Reading, indicated in a preliminary hearing at Westminster Magistrates Court that it would plead guilty to 10 charges of corruption and violating sanctions.

The company tried to influence officials in Jamaica and Ghana when bidding for pub-he contracts in the 1990s. It also paid more than €422,000 (£365,000) to Saddam Hussein´s regime between 2001 and 2002, violating the terms of the UN oil-for-food scheme in Iraq.

Sentencing will take place later this month at Southwark Crown Court.

Mabey & Johnson now faces fines and will make reparations to Jamaica, Ghana and a UN programme which benefits Iraq. It has also agreed to an "internal compliance programme" carried out by an "SFO-approved independent monitor".

The prosecution, first disclosed by The Daily Telegraph on Thursday, is evidence that the SFO´s investigation, led by Roddy Gillanders, into alleged breaches by British firms of the oil-for-food programme is working.

Richard Alderman, the SFO´s director, said: "These are serious offences and it is significant that Mabey & Johnson has co-operated 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."

Five of Mabey & Johnson´s eight directors have stepped down since spring 2008 when the its holding company told the SFO of the corruption offences. New management was instaUed last year by the holding company. The SFO declined to say whether it would press charges against any individuals.

Peter Lloyd, Mabey & Johnson´s new managing director, said: "We deeply regret the past conduct of our company, and we have committed to making a fresh start, wiping the slate clean of these offences."

Staff have been retrained and sales and associated systems reviewed. He added: "We are taking steps to ensure we can protect jobs and take our business forward. We know we have a strong and committed team and excellent products, which are highly valued globally."

Legal experts said the success could see the SFO pursue other firms suspected of wrongdoing. Dan Hyde, a bribery and corruption lawyer from Cubism Law, said: "This is a landmark case as it signals success for the SFO in its first home prosecution of a company involved in corruption overseas.

"The SFO... will now have confidence it can tackle UK companies suspected of fraud abroad. Now the SFO has had a success with this type of action, it could signal increased interventions and prosecutions of UK companies which have foreign dealings."

Mr Alderman, SFO director, said the case was a model for companies that want to self-re port corruption