01 December 2015

Bribery case prompts first deferred prosecution agreement

A bribe linked to a $600 million sovereign loan to Tanzania was at the heart of the UK's first deferred prosecution agreement; agreed in court yesterday by Sir Brian Leveson, head of the Queen's Bench Division.

In Serious Fraud Office v Standard Bank Plc, Southwark Crown Court heard that Standard Bank accepted a penalty of $16.8 million for failure to prevent the bribe. Tanzania will receive $6 million and the bank will also cover the SFO’s costs of £330,000. It was the SFO’s first successful use of section 7 of the Bribery Act – the offence of failure to prevent a bribe, and no allegation of knowing participation in an offence of bribery was made against the bank or its employees.

Additional fee

According to the statement of facts, officials at ST (Tanzania’s sister Standard Bank), chief executive Bashir Awale and head of corporate and investment banking Shose Sinare, increased the costs of the sovereign loan with an additional one per cent fee paid to be paid to a company, EGMA Ltd. Upon completion of the transaction, almost all the $6m sum was withdrawn in cash in the days after.

Internal investigation

After staff at ST raised concerns, international law firm Jones Day, Standard Bank’s counsel, carried out an internal inquiry with the assent of the Serious Organized Crime Agency and the SFO.

Benchmark

Concluding, Leveson appraised the 'very great care' taken by all parties to the final ruling, commenting that this case should create a standing benchmark against which similar future cases may be ruled. Source: The Law Society Gazette