International - Written by Barry & Richard on Wednesday, January 11, 2012 14:40 - 0 Comments
The view for those previously at the top of Mount Olympus
The fact that the Bribery Act is not retrospective in its operation means that its full effect will take time. Only activities taking place after 30th June 2011 can be the subject matter of any prosecution under sections 1,2,6,7 and 14 of the Act.
We have written before of the possible impact of section 14, designed as it is to bring personal responsibility into the Board Room. The provisions of section 14 mean that there must be a conviction under either sections 1,2 or 6 before it can be considered; the SFO then having to prove that the individual director prosecuted either consented or connived in some material way with the person guilty of a section 1,2 or 6 offence.
Olympus, due its recent troubles is proving to be an interesting example of an alternative route in immediate action against alleged corrupt practices.
Rather than waiting for any criminal process it has been announced the company is to sue its President Shuichi Takayama and 18 other current and former executives for £30 million in damages.
The company has been impelled to action no doubt by the fact that as a result of the alleged corrupt behaviour of certain officers it has lost 60 % of its value due to a severe fall in its share price.
It is interesting that there is a general sea change in the views of investors. In times gone by it may have gone unremarked that the way of doing business was to engage in third party payments, avoiding the use of the term corruption and using the justification that ‘it is just how business is done’. The news of the Civil action caused a 25% jump in the share price of Olympus. It seems that the investors approve!
We have written before about the fact that SFO are currently committed to reinforce the concept of “ethical investment and shareholding”. Whilst Olympus may be an extreme example what is clear is that section 14 is not the only way in which alleged corruption may be investigated and censured in the Board Room.