No room for corporate complacency, says expert, as SFO brings first Bribery Act charges

Out-Law News | 16 Aug 2013 | 9:37 am | 2 min. read

The Serious Fraud Office (SFO) has made its first charges in relation to offences under the Bribery Act, it has announced.

It has charged three men connected with Sustainable AgroEnergy plc with offences of "making and accepting a financial advantage" under the regime, as part of a wider investigation into an alleged £23 million 'bio fuel' investment fraud.

Although other individuals have previously been charged with offences under the Bribery Act, which came into force in 2011, these have been brought by other prosecuting bodies such as the Crown Prosecution Service (CPS). The SFO is the independent government agency that investigates and prosecutes serious and complex fraud or corruption.

Bribery law expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that although the charges had been brought against individuals, it "would not be long" before a corporate offender was prosecuted under the Bribery Act.

"The SFO have confirmed active investigations into corporates under the Bribery Act and they can be expected to follow through," he said. "Businesses are complacent at their peril."

The Bribery Act came into force in July 2011 and, broadly speaking, states that companies with a presence in the UK can face prosecution for bribery or failing to prevent bribery regardless of where the alleged activity has taken place.

Importantly, a company can also be responsible for bribery carried out by its employees or third-party agents without its knowledge or consent. Companies can be found guilty of failing to prevent bribery by people working for or on behalf of the business, unless the company can show that they have "adequate procedures" designed to prevent bribery in place.

Under section two of the Act, bribery is defined as when a company or individual requests, agrees to receive or accepts an advantage - financial or otherwise - with the intention that it or someone else perform a "relevant function or activity" improperly. Under the Act, the maximum penalty for individuals found guilty of bribery is 10 years' imprisonment and an unlimited fine.

In a statement on its website, the SFO said that four men connected to Sustainable AgroEnergy had been charged with "conspiracy to commit fraud by false representation" and "conspiracy to furnish false information" in relation to the promotion and selling of investment products to UK investors. The alleged fraud, valued at approximately £23m, took place between April 2011 and February 2012, the SFO said.

The four men charged include three former executives of the company, which is now in administration along with its parent company, and an independent financial adviser associated with the company. The company's former Chief Commercial Officer, Gary West; former Financial Controller, Fung Fong Wong; and the independent financial adviser, Stuart Stone have also been charged with the Bribery Act offences.

The SFO has begun legal proceedings against the three and the company's former chief executive, James Whale, it said. They will appear before Westminster Magistrates Court on 23 September, it said.

In November 2011 Munir Patel, a former magistrates' court administrative officer, became the first person to be convicted of an offence under the Bribery Act. Patel, who was charged by the CPS, admitted accepting a £500 bribe to "get rid of a speeding charge" and was sentenced to six years in prison for bribery and misconduct in public office offences.