GENERAL CORPORATE

First sentence against a company for its failure to prevent bribery (section 7 of the Bribery Act 2010)

Sweett Group plc (“SGplc”), an AIM listed company, was last week convicted for its failure to prevent the bribery of a foreign national by its wholly owned Cypriot subsidiary Cyril Sweett International Limited. The failure occurred in connection with a contract awarded for the provision of project management and other services expected to provide a gross profit of nearly £900,000. Amongst other things the judge noted that SGplc had previously received and ignored clear recommendations from an adviser, instructed to carry out an audit of the group’s financial controls, expressing serious concerns about the way in which the subsidiary was operating. A sum equal to SGplc’s gross profit was confiscated and, in addition, it was fined £1.4 million.

Impact – it was concluded that the case could not be dealt with by way of a deferred prosecution agreement (a “DPA”) thereby becoming the first conviction for the Serious Fraud Office (“SFO”) under section 7 of the Bribery Act 2010. A DPA was used last November to validate a concluded agreement between the SFO and Standard Bank Plc (“SB”). Following an investigation, the SFO had formed the view that there was a reasonable suspicion that SB had failed to prevent bribery contrary to section 7 of the Bribery Act 2010. In the light of these recent decisions, organisations within scope of the Bribery Act 2010 may want to take the opportunity to review their procedures.

Background - a “relevant commercial organisation” (“C”) is guilty of an offence under section 7 if a person “associated” with C bribes another person, intending to obtain or retain business or a business advantage for C. C has a defence if it can show that it had in place “adequate procedures”.

OTHER ITEMS

  • BIS has published its response to its consultation on proposed changes to the financial reporting requirements for LLPs and qualifying partnerships confirming that the regime will be aligned with that applicable to companies.
  • Bearer shares, shares that have been issued but where no-one has been registered as the owner of the shares, were abolished from 26 May 2015 following implementation of amendments to the Companies Act 2006 by the Small Business, Enterprise and Employment Act 2015. No new bearer shares can now be issued and the Act applies a prescribed procedure requiring the conversion or surrender of existing bearer shares within a fairly short timescale. Any bearer share not surrendered by 26 February 2016 can no longer be surrendered and must be cancelled before 26 May 2016. Failure by a company to follow the prescribed procedure for dealing with bearer shares is an offence.
  • BIS’s non-statutory guidance on the PSC register has been further amended. The changes are minor corrections in relation to guidance for LLPs.
  • Certain of Companies House fees are changing on 6 April 2016; the majority are decreasing.
  • ESMA has issued translations of its standard form for the disclosure of home member states by issuers under the transparency directive.