Today, the High Court has ordered Macmillan Publishers Limited ("Macmillan") to pay £11,263,852.28 plus the SFO's costs under section 5 of the Proceeds of Crime Act 2002 in relation to unlawful conduct. As a result of the parallel World Bank Process the company has been debarred from participating in World Bank funded tender business for a minimum period of three years.
Macmillan first came to the attention of the authorities following a report from the World Bank which indicated that an agent of Macmillan attempted to pay a sum of money to win a World Bank funded tender to supply educational materials in Southern Sudan. Macmillan did not win the contract. Following the World Bank's report search warrants were executed by the City of London Police in December 2009. In March 2010 Macmillan self-reported the corporate case to the Serious Fraud Office ("SFO").
The SFO required Macmillan to instruct external lawyers at the company's cost to conduct a review of the books and records of the company with a view to identifying areas of corruption risk. The product of the internal investigation was used by the SFO, working co-operatively with the City of London Police and the World Bank Group, to identify the limited area within the business which potentially presented a bribery and corruption risk. The SFO required further detailed investigations by Macmillan into their public tender contracts in Rwanda, Uganda and Zambia over the period 2002-2009 whether funded by the World Bank or otherwise.
The contracts under investigation related to the supply of educational material. The materials were supplied by publishers, often following the issuing of a public tender by the national government of a country. Such public tender processes were susceptible to improper relationships being formed and corruption taking place. It was impossible to be sure that the awards of tenders to the Company in the three jurisdictions were not accompanied by a corrupt relationship.
Accordingly it was plain that Macmillan may have received revenue that had been derived from unlawful conduct. Following an accounting examination the SFO was in a position to determine the appropriate amount to be recovered. Macmillan will be subject to review by a monitor who will report to the Director of the SFO within twelve months and to the World Bank.
A civil settlement was possible because;
- Macmillan approached the SFO with a view to co-operation;
- Macmillan had fully co-operated with the SFO throughout the process and complied with an agreed timetable;
- Macmillan had fully complied with other authorities including the World Bank Group; and
- Macmillan had, in response to learning of the allegations of bribery and corruption, reacted appropriately in firstly, reviewing its internal anti-bribery and corruption policies and procedures, appointing external consultants to recommend and help implement an internal appropriate anti-bribery and corruption compliance regime.
This case is indicative of the general increase in enforcement by the SFO. For commentary and updates on enforcement see our Enforcement Trends publication. In light of the Bribery Act which came into force on 1 July 2011 we expect further growth in enforcement by the SFO around these types of issues. Under the Bribery Act commercial organisations can be held liable for bribes paid by those acting on their behalf anywhere in the world. It is clear from the SFO's approach to this case that it is possible to manage the outcome of any unlawful activity and obtain a civil rather than a criminal remedy if the organisation reports itself to the SFO at the appropriate time.
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