First charges by SFO under Bribery Act

First charges by SFO under Bribery Act

Published:

Author: Ron Reid

The Serious Fraud Office (SFO) has brought proceedings against three individuals under the Bribery Act 2010.

The first bribery charges brought by it, though not the first prosecutions commenced under the Act. There have been previous successful prosecutions by the police.

The men are all connected to Sustainable AgroEnergy plc.

They, together with another former officer of the company, have been charged with offences of conspiracy to commit fraud arising out of the promotion and selling of 'bio fuel' investment products to UK investors.

The value of the alleged fraud is approximately £23m, and the offences are said to have taken place between April 2011 and February 2012

Whilst, presumably, Sustainable AgroEnergy plc could also be technically guilty of offences under the Bribery Act, there has been no announcement of a prosecution against that organisation.

As Sustainable AgroEnergy plc is a subsidiary of Sustainable Growth Group (SGG) and the SGG group of companies were placed into administration in March 2012, the SFO has probably decided that it is not in the public interest to spend time and money prosecuting an organisation that will be unable to pay any financial penalty.

Bribery offences committed by individuals carry a penalty of up to 10 years' imprisonment, an unlimited fine and confiscation of assets. Individuals who were statutory directors at the time of any offence can be disqualified for 15 years under the Company Directors Disqualification Act.

Whilst this does not amount to the long-awaited first prosecution under section 7 of the Bribery Act - known as the 'corporate offence' - whereby a commercial organisation can be prosecuted simply for failing to prevent active bribery by persons associated with it, other ongoing investigations are likely to lead to such prosecutions before much longer.

Some commercial organisations have recently relaxed some of their internal controls and enforcement regarding matters such as promotional expenses and hospitality, as well as the making of facilitation payments. This news should serve as a reminder that breaches can and will be prosecuted.

Any procedures you have in place should be regularly reviewed, well communicated and any training frequently refreshed.