Two former employees of Smith & Ouzman Ltd (“SO”) were sentenced at Southwark Crown Court yesterday for foreign bribery offences. SO is an Eastbourne-based printing company that specialises in security documents, such as ballot papers.
A jury found that between 1 November 2006 and 31 December 2010, corrupt payments totalling £395,074 were made to public officials in Kenya and Mauritania in return for contracts.
Mr Christopher Smith, chairman of SO was found guilty of two counts of corruptly agreeing to make payments contrary to s. 1(1) of the Prevention of Corruption Act 1906. He was sentenced to 18 months’ imprisonment, suspended for two years, as well as 250 hours unpaid work and a three-month curfew.
Mr Nicholas Smith, sales and marketing director of SO was found guilty of three counts of corruptly agreeing to make payments and was sentenced to three years’ imprisonment.
Both were disqualified from acting as company directors for six years.
SO has also been found guilty of offences and will be sentenced at a later date.
This prosecution represents the SFO’s first successful contested conviction of a corporate for overseas bribery. While the court has yet to sentence SO, the fact that the jury was able to deliver a guilty verdict for the corporate is significant in itself. As the wrongdoing occurred prior to the Bribery Act 2010 coming into force, the jury had to find that those individuals committing bribery within the business were the “directing mind and will” of the corporate for the purpose of those acts. This so-called identification doctrine has come under much criticism for being a difficult threshold to meet and was one of the reasons for the introduction of the strict liability corporate offence under the Bribery Act 2010. This case has demonstrated that it is possible to secure convictions of corporates under the pre-Bribery Act regime.
It also shows the increased international co-operation between prosecuting authorities, as the SFO was keen to thank the Kenyan, Ghanaian and Swiss authorities for their assistance in securing these convictions. The prosecution is also indicative of the increased ferocity with which the SFO is seeking to prosecute and convict corporates of overseas bribery and a salient message to those corporates doing business overseas who might assume that wrongful acts committed overseas will not be punished in the UK.
Behaviour overseas will also come into sharper focus as a result of the changes to the director disqualification regime set out in the Small Business, Enterprise and Employment Bill, which is expected to receive royal assent in March. Disqualification will be available for an offence committed outside Great Britain corresponding to an indictable offence under the law of England and Wales (or Scotland) in connection with the promotion, formation, management, liquidation or striking off of a company (or any similar procedure). Also, the court will be able to take a director’s conduct in relation to overseas companies into account when considering certain disqualification applications.