Standard Bank Failed to Prevent Alleged Bribery at Tanzania Unit, UK Court Hears
November 30 2015 - 7:37AM
Dow Jones News
By Margot Patrick
LONDON--The British arm of African lender Standard Bank failed
to prevent alleged bribery in its Tanzania unit, a London court
heard Monday.
The U.K. Serious Fraud Office said the former chief executive
and the former head of corporate and investment banking at Standard
Bank in Tanzania arranged for $6 million in fees from a $600
million government bond sale in 2013 to be paid to a local company
owned by government officials. The case was presented Monday to a
senior judge who has already given his preliminary approval to what
would be the first deferred prosecution agreement in Britain.
Standard Bank last week said it expected to settle the matter
for no more than $40 million. The SFO on Monday said fines and
compensation in its agreement came to $16.8 million.
The court heard that the U.S. Securities and Exchange Commission
will also be announcing a resolution of its own investigation into
the bond sale.
If the judge approves the SFO application, it will mark the
first successful use of a tool introduced last year for corporate
prosecutions in Britain. Commonly used in the U.S., deferred
prosecution agreements give alleged wrongdoers a chance to
cooperate fully with prosecutors in exchange for a less punitive
outcome, typically involving a fine, admission of breaking rules
and measures to improve compliance. Under such agreements, the
company is charged but criminal proceedings are suspended as long
as conditions of the DPA are met.
The SFO said a Standard Bank employee flagged the alleged breach
and that the bank reported it to the SFO in July 2014. The proposed
deferred prosecution agreement would involve a fine, compensation
to the Tanzania government, improvements in compliance systems and
data sharing with other authorities investigating the matter, the
SFO said. The agreement would run for three years.
The alleged breach of Britain's anti bribery act occurred before
a majority investment in Standard Bank's London arm by Industrial
and Commercial Bank of China. ICBC announced the deal to buy 60% of
the unit in early 2014 and completed the purchase in February.
The U.K. Financial Conduct Authority previously fined Standard
Bank in London GBP7.6 million over failures between 2007 and 2011
in its anti-money laundering systems.
Write to Margot Patrick at margot.patrick@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 30, 2015 08:22 ET (13:22 GMT)
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