On February 12, the Serious Fraud Office (SFO) announced that it has charged Barclays Bank Plc, a subsidiary of Barclays Plc. The charges relate to the financial assistance Barclays Bank Plc gave to Qatar Holding LLC between 1 October and 30 November 2008, which was in the form of a USD 3 billion loan.
This follows charges brought against the holding company, Barclays Plc, and four individuals in June 2017, whose trial has been set for January 2019 (see our newsletter of 06/26/2018).
On February 13, Norway’s wealth fund – managed by Norges Bank Investment Management – set out new expectations for the companies it invests in, regarding the way they prevent and fight corruption internally.
The fund said in a statement it expects “boards to ensure that the company sets a clear policy on anti-corruption and that relevant measures are integrated into business strategy, risk management and reporting”. A day earlier, the Ethisphere Institute had released “The 2018 World’s Most Ethical Companies Honoree List” honoring the 135 most ethical companies in the world.
On February 6, a new law was adopted by the Federal District – one of the 27 districts of Brazil – requiring the implementation of a compliance program by companies seeking to enter into contracts, partnerships, agreements, concessions, or public-private partnerships with the public administration of the Federal District, in amounts equal to or greater than the bidding price, estimated between BRL 80,000 and BRL 650,000.
This requirement only applies to contracts with a term equal to or greater than 180 days. In case of non-compliance with the law requirements, a fine of 0.1% of the contract value may be daily imposed. Earlier in December 2017, the district of Rio de Janeiro had already published a similar law, making it mandatory for companies entering into contract with the public administration of the State of Rio de Janeiro to implement a compliance program (see our newsletter of 12/11/2017).
On February 13, the former Guatemalan President, Alvaro Colom, and the former finance minister, Juan Alberto Fuentes – who is now chairman of Oxfam International –, were arrested by Guatemalan authorities as part of a local corruption investigation (Reuters, 02/13/2014).
The investigation is reportedly looking at buses procurement contracts for the capital city (amounting to USD 35 million) which were awarded to four companies through a bidding process, and were allegedly inflated.
On February 14, Jacob Zuma announced his resignation as President of South Africa “with immediate effect” after the ruling African National Congress party ordered him to step down, following several corruption scandals.
His resignation came just hours after police raided the luxury home of the Gupta family, billionaire allies of the former president who have been at the centre of corruption allegations against Jacob Zuma and his circle for years. On February 15, Cyril Ramaphosa was elected President of South Africa.
On February 7, the former commercial director of Cofely, a Spanish subsidiary of Engie, confessed to judicial authorities that the company “had a specific fund to bribe public officials from several municipalities in exchange of the award of energy efficiency contracts”, according to El País. Le Figaro indicates that the kickbacks – from 2% to 3% of the total contract’s worth – were distributed to a dozen Spanish cities’ officials, from contracts representing a total amount of 300 million euros. On February 9, another ex-director of Cofely declared that the Cofely’s Managing Director at the time, was aware of such practices and that “Spanish managers of Cofely had to inform the headquarters in Paris of all the projects that exceeded 500,000 euros and had to ask for their signature for those that were over one million euros”.
This case is a branch of the Punica Operation, which started in Spain in 2014 and revealed a large corruption scheme in the attribution of public contracts involving Spanish politicians, mostly members of the Partido Popular. Official investigations started in 2014 and according to El Español, ” Anticorruption Prosecutor’s Office expects to be able to present its report to the judge soon for the trial to begin “.
On February 15th, Airbus announced, in a note accompanying its 2017 results, that it will fully cooperate with US authorities on French and British corruption investigations that could fall within US jurisdiction. US authorities requested information relating to the investigations conducted by the Parquet National Financier (PNF) and the Serious Fraud Office (SFO) on allegations of fraud, bribery and corruption, as part of the use of intermediaries in the civil activities of Airbus.
The aeronautics and defense company announced, moreover, that it has informed US authorities of irregularities in certain export contracts of military equipment.
On February 12, the US Department of Justice (DOJ) announced that it had indicted five former employees of Petróleos de Venezuela SA (PDVSA) – Venezuela’s state oil company – for money laundering and conspiring to violate the Foreign Corrupt Practices Act (FCPA). The indictment alleges that the five defendants solicited bribes in exchange for obtaining contracts with an agent of the state company and then laundered the funds as part of an international network in several countries, including Switzerland.
Four of them were arrested in Spain in October 2017 by Spanish authorities on arrest warrants issued by US authorities. One of the defendants was extradited to the United States while 3 others remain in Spanish custody pending extradition. A fifth defendant remains at large.
On February 14, Credit Suisse announced it was under investigation in the United States over its hiring practices in the Asia Pacific region. In particular, Credit Suisse said it has been responding to requests from the DOJ and the SEC regarding whether it hired referrals from government agencies and other state-owned entities in exchange for investment banking business and/or regulatory approvals – which could constitute a potential violation of the FCPA –.
Credit Suisse said it was cooperating with the authorities on this matter. JP Morgan was already sentenced to a USD 264 million fine in November 2016 for similar hiring practices. Other banks, including HSBC, have also been contacted by US authorities regarding the same matter.
On February 13, the Seoul Central District Court sentenced Shin Dong-bin, the Lotte Group chairman, to two years and six months of imprisonment for bribery tied to an influence-peddling scandal that led to the impeachment of the former president (see our Newsletter of 04/24/2017).
The Seoul Central District Court said that Shin Dong-bin offered 7 billion won (USD 6.5 million) in bribery to the former president to obtain favors such as winning a license to open a duty free shop. The same day, Choi Soon-sil – a close friend of former President Park Geun-hye – was sentenced to 20 years in jail for corruption, influence-peddling and abuse of power. Choi was accused of using her presidential connections to pressure conglomerates – including electronics giant Samsung and Lotte Group – to donate millions of dollars to two non-profit foundations she controlled (see our Newsletter of 12/18/2017).