Johannesburg - Standard Bank unit has agreed to pay British authorities $33 million in that countries first deferred prosecution agreement.
The DFA was agreed to so the bank could resolve an investigation into bribery at its Tanzanian unit. The unit is now known as ICBC Standard Bank after Standard Bank agreed earlier this year to sell a 60 percent stake in its UK unit to Chinese bank ICBC for $690 million.
The landmark settlement relates to allegations that SBPlc failed to prevent two executives of Stanbic Bank Tanzania (Stanbic) “from engaging a local partner with the intent that the engagement would induce Tanzanian government representatives into acting partially in awarding a capital raising mandate to SBPlc and Stanbic”.
In a statement to shareholders late Monday afternoon, Standard Bank notes it and SBPlc self-disclosed the issue to the UK’s Serious Fraud Office in April 2013 within days of it coming to their attention, and assisted the SFO in full in its investigations.
The two banks also commissioned an international law firm, Jones Day, to conduct an unrestricted, comprehensive investigation and reported the resulting findings in full to the SFO.
“The group and its subsidiaries take the risk of corruption very seriously and deeply regret that this issue arose on a transaction with which they were involved. The SFO has not made any allegations that anyone within SBPlc knew of the intentions of the two Stanbic employees.
“The group is confident that the circumstances giving rise to the DPA were an isolated incident relating to one transaction to which the group and its subsidiaries have responded appropriately. None of the entities have previously been investigated or charged for bribery or corruption and nor have they been the subject of any other criminal investigation by the SFO,” says Standard Bank.
The agreement was struck with the United Kingdom Serious Fraud Office with the approval of the President of the Queen’s Bench Division of the High Court of England and Wales, the Right Honourable Sir Brian Leveson.
A DPA is a voluntary agreement through which a prosecutor agrees to suspend a prosecution in exchange for the defendant agreeing to fulfil certain requirements. The proceedings will be discontinued once the term of the DPA has expired, providing that the requirements of the DPA have been fulfilled.
SBPlc has agreed to pay a penalty of $16.8million, which includes a one third reduction for the self-disclosure and co-operation. SBPlc will also pay $7.05 million in compensation to the government of Tanzania and $8.9 million to refund profits related to the transaction and expenses related to the investigation.
Standard Bank Group indemnified ICBC against the cost of such resolutions and will accordingly bear the cost of the penalty.
IOL