Friday, 10 July 2009

Sanctions-busting Reading Company Pleads Guilty

In a landmark hearing Reading-based company Mabey & Johnson has declared that it would plead guilty to 10 charges of corruption and violating sanctions.

At Westminster Magistrates Court the modular bridge-building firm admitted it had attempted to influence public works contracts during the 1990s by bribing officials in Jamaica, Ghana and Iraq.

Mabey & Johnson accepted that it had paid almost £400,000 to Saddam Hussein's regime in contravention of the terms of the UN oil-for-food programme and will now face a series of fines and reparations in sentencing at Southwark Crown Court. Five of eight company directors have resigned since the prosecution was announced in spring 2008. An SFO-approved independent monitor has also been appointed to oversee future dealings.

Speaking for Mabey & Johnson, managing director Peter Lloyd said:
"We deeply regret the past conduct of our company, and we have committed to making a fresh start, wiping the slate clean of these offences."
Meanwhile legal expert Dan Hyde from Cubism Law praised the prosecution by the Serious Fraud Office and explained that it would likely lead to further cases:
"Now the SFO has had a success with this type of action, it could signal increased interventions and prosecutions of UK companies which have foreign dealings."
Corporate corruption is a notoriously difficult charge to gain convictions on - particularly in the area of defence contracts - so the move has pleased campaigners who have long been hindered by a combination of legal deficiencies and political interference at establishment level. It also signals a turnaround from the hypocrisy of British criticism of corruption in developing countries while turning a blind eye on City of London practises which feed it.

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Update: Gideon Mack gets down to basics stating that the rules of the game are generally understood.

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references: Reading Post, BBC, Guardian, FT, Daily Telegraph, Times Online, Reuters, Construction Europe, Radio Jamaica, Google.

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