Bribery Act & Proceeds of Crime - Written by Barry & Richard on Friday, July 22, 2011 3:04 - 0 Comments
BREAKING: SFO settles Macmillan investigation for £11.2 million
Macmillan Publishers Limited have been ordered to pay in excess of £11.2 million and are subject to the appointment of a monitor as a result of the unlawful conduct related to its Education Division in East and West Africa.
The Order was made under Part 5 of the Proceeds of Crime Act 2002 (POCA).
The initial enquiry commenced following a report from the World Bank. The World Bank debarred Macmillan last year for a six year period (which can be reduced) in a related enforcement process.
The SFO report says that the conduct was uncovered when an attempt had been made by an agent to pay a sum of money with the view in mind of persuading the award of a World Bank funded tender to supply educational materials in Southern Sudan. The Company did not win the contract.
The SFO said that “Search warrants were executed by the City of London Police in December 2009 and in March 2010 Macmillan reported the corporate case to the SFO. The matter was dealt with using the SFO’s approach to dealing with overseas corruption“.
In a familiar process to those familiar with US investigations the costs of the investigations were met by Macmillan and the substantial product of them was presented to the SFO and in a separate presentation to the World Bank Group.
The SFO have highlighted a number of key features in the resolution of the investigation Macmillan:
- approached the SFO with a view to co-operation;
- fully co-operated with the SFO throughout the process and complied with an agreed timetable;
- fully complied with other authorities including the World Bank Group;
- in response to learning of the allegations of bribery and corruption, reacted appropriately in firstly, reviewing its internal anti-bribery and corruption policies and procedures, appointing external consultants to recommend and help implement an internal appropriate anti-bribery and corruption compliance regime;
- As a result of the parallel World Bank Process the company has been debarred from participating in World Bank Funded tender business for a minimum period of three years. In addition, the Company has taken the decision to cease all live and prospective public tenders in its Education Division business, in East and West Africa regardless of the source of funds;
- as a result of withdrawing from the sector lost significant revenue including surrendered bid securities;
- The actual products supplied were of a good quality; and
- There was no material identified to support a conclusion that the products supplied were overpriced.
Richard Alderman, the Director of the Serious Fraud Office stated: “I am pleased with this outcome. Civil recovery allows us to deal with certain cases of corporate wrong-doing effectively. It delivers value for money to the public by saving the cost of lengthy investigations and protracted legal proceedings and removes any property obtained as a result of the wrong-doing. At the same time it forces the company to reform its practices for the future.”
The resolution of this case is yet another example of the use of POCA to resolve a criminal investigation without resorting to a criminal prosecution. An area Richard Alderman said earlier this year had been overlooked and which he was seeking to use more frequently going forward.
Much has been written (albeit not by us) about the uncertainties in theory about the UK system of resolving similar cases.
In practice, as we have said in the past, there is often a practical solution using the civil settlement route. This is a process which we are familiar with both in the UK and elsewhere. A chief advantage of this route is that it can avoid a criminal prosecution.