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”.
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