Jailing of directors for Bribery Act offences a warning to firms

Out-Law News | 25 Apr 2018 | 9:48 am | 1 min. read

Two former company directors have been imprisoned for offences under the Bribery Act and disqualified from holding director-level positions in a warning to firms to have appropriate anti-bribery procedures in place.

The prison sentences and disqualifications follow the earlier conviction of a company, Skansen Interiors Ltd (SIL), for failing to have in place adequate procedures to prevent bribery, which is a criminal offence under section 7 of the Bribery Act.

SIL's former managing director, Stephen Banks, gave Graham Deakin of developer DTZ Ltd £10,000 and promised him a further £29,000 in return for confidential information in 2012 and 2013. Banks was intending to use the information to help SIL win commercial property contracts from DTZ.

Both Banks and Deakin pleaded guilty to bribery at an earlier hearing. Banks has now been sentenced to 12 months imprisonment and disqualified from acting as a director for six years, while Deakin has been sentenced to 20 months imprisonment and has been disqualified for seven years. Deakin has also been fined £10,697, which he must pay within three months or face a further seven months in prison.

Corporate crime expert Olga Tocewicz of Pinsent Masons, the law firm behind Out-Law.com, said that the case "illustrates the appetite of law enforcement agencies to prosecute not only grand corruption but also domestic, and comparably low-level bribery schemes". SIL is a small subsidiary of the wider Skansen Group, and has been dormant since 2014.

"The case highlights an important lesson for all organisations which believe that they are simply 'too small' or 'not international enough' for the Bribery Act to apply," Tocewicz said. "Sector, in this case construction, and business practices are of equal importance and should inform the risk assessment conducted by an organisation considering its risk exposure."

"In its defence, SIL sought to rely on its internal procedures arguing that they were indeed adequate for the size and footprint of the organisation. The jury disagreed with that assessment, the prosecution relying heavily on the lack of appropriate staff training and no explicit reference to anti-bribery and corruption in its internal policies," she said.

Section 7 of the Bribery Act creates a defence where a company can prove that it had in place adequate procedures designed to prevent persons associated with the business from committing bribery.

Anne Louise McCusker, prosecuting, said that Banks and Deaken had "worked together in their criminal scheme to promote the commercial interests of SIL over other companies who tendered for contracts in good faith".

"Only when a new managing director took over at SIL was the criminal conduct discovered and reported to police," she said.

"This criminal conduct is corrosive to commerce and undermines the economic interests of the City of London and the United Kingdom as a whole," she said.