First corporate conviction for failure to prevent bribery
26th Feb 2016
Sweett Group Plc has become the first company to be convicted of new bribery laws, being fined £2.25m after its conviction.
The AIM listed construction firm pleaded guilty to charges last December which followed a three year investigation by the Serious Fraud Office (SFO) into bribes paid to win contracts in the United Arab Emirates.
His Honour Judge Martin Beddoe issued fines of £1.4m, as well as an £851,000 confiscation order. In addition, the SFO was awarded £95,000 in costs.
The court heard how the company had “wilfully ignored” KPMG audits which flagged deficiencies in their operations.
HHJ Beddoe said of Sweett’s conviction under the Bribery Act 2010: “The whole point of section 7 is to impose a duty on those running such companies throughout the world properly to supervise them.
“Rogue elements can only operate in this way – and operate for so long – because of a failure properly to supervise what they are doing and the way they are doing it.”
David Green CB QC, the director of the SFO, remarked that such acts of bribery significantly damage the UK’s commercial reputation, and that “This conviction and punishment, the SFO’s first under section 7 of the Bribery Act, sends a strong message that UK companies must take full responsibility for the actions of their employees and in their commercial activities act in accordance with the law.”
Lloyd Firth, an associate in WilmerHale’s UK investigations and criminal litigation team, believes the impact of Sweett Group’s actions has already been seen, saying that “The investigation and conviction has had a severe commercial impact, as evidenced by Sweett Group’s recent announcement that it has decided to withdraw entirely from doing business in the Middle East and North Africa.”
He continued to say that “The size of the fine has also allayed fears within the defence lawyers’ community that the company’s “uncooperative” decision to continue with its own internal investigation in 2014 – despite being asked not to do so by the SFO – may have amounted to “wilful obstruction” and a high culpability level under the sentencing guidelines.”
Douglas McCormick, Sweett Group’s chief executive officer, said in a statement that “We have strengthened our internal systems, controls and risk procedures, and refined our strategy, to ensure this company should never again fall victim to such conduct.”