News: Sarclad bribery trial ends with acquittals
Former staff members have been acquitted of conspiracy to corrupt and conspiracy to bribe after their company earlier agreed to pay some £6.5m in reparations.
Rothbiz reported in 2016 that criminal charges were brought against former employees of Sarclad, a Rotherham-based specialist in technology based products for the metal industry, following investigations by the Serious Fraud Office (SFO).
The firm is a world leader in providing technology-based products to assist metal producers reduce manufacturing costs and improve product quality. It relocated from Chesterfield to the Advanced Manufacturing Park (AMP) in Rotherham, opening new facilities in July 2012.
A Deferred Prosecution Agreement (DPA) was reached between the SFO and Sarclad Ltd in July 2016. Sarclad accepted the charges of corruption and failure to prevent bribery in relation to the systematic use of bribes to secure contracts for the company between June 2004 and June 2012. The contracts that were the subject of the DPA had a total value of over £17m.
As a result of the DPA, Sarclad agreed to pay financial orders of £6,553,085, comprised of a £6,201,085 disgorgement of gross profits and a £352,000 financial penalty. £1,953,085 was paid by Sarclad's US registered parent company as repayment of a significant proportion of the dividends that it received from the company over the indictment period.
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The DPA also required Sarclad to fully cooperate with the SFO and to provide a report addressing all third party intermediary transactions, and the completion and effectiveness of its existing anti-bribery and corruption controls, every twelve months for the duration of the DPA. The terms of the DPA have now been met and the DPA is now concluded.
A self-report was made following an investigation by the company of an issue which had come to light at the end of August 2012 as a result of the company's implementation of a compliance programme. The subsequent report by Sarclad's law firm was delivered to the SFO in January 2013, after which the SFO conducted its own investigation.
74 contracts were investigated (28 considered "implicated" and 46 considered "suspicious"), covering countries such as China, Korea, India and Taiwan. Evidence was found of payments to agents that were agreed outside the "percentage of contract value" basis expressed in the agency agreements.
Legal documents released this week show various requests from agents for money in order to secure contracts. In one example, a Korean-based agent asked Sarclad staff: "Will please Sarclad pay for the following costs which is essential for successful contract?
"Under-the-table cost (typical and important Korea) 9,000 euro
"Travel costs to take client to China as well as to England 14,000 euro
"Total 23,000 euro
"These expenses will be spent by Korean agent for clients to secure the contract."
Michael Sorby, Adrian Leek and David Justice were acquitted of conspiracy to corrupt and conspiracy to bribe.
Sarclad website
Images: Sarclad
Rothbiz reported in 2016 that criminal charges were brought against former employees of Sarclad, a Rotherham-based specialist in technology based products for the metal industry, following investigations by the Serious Fraud Office (SFO).
The firm is a world leader in providing technology-based products to assist metal producers reduce manufacturing costs and improve product quality. It relocated from Chesterfield to the Advanced Manufacturing Park (AMP) in Rotherham, opening new facilities in July 2012.
A Deferred Prosecution Agreement (DPA) was reached between the SFO and Sarclad Ltd in July 2016. Sarclad accepted the charges of corruption and failure to prevent bribery in relation to the systematic use of bribes to secure contracts for the company between June 2004 and June 2012. The contracts that were the subject of the DPA had a total value of over £17m.
As a result of the DPA, Sarclad agreed to pay financial orders of £6,553,085, comprised of a £6,201,085 disgorgement of gross profits and a £352,000 financial penalty. £1,953,085 was paid by Sarclad's US registered parent company as repayment of a significant proportion of the dividends that it received from the company over the indictment period.
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The DPA also required Sarclad to fully cooperate with the SFO and to provide a report addressing all third party intermediary transactions, and the completion and effectiveness of its existing anti-bribery and corruption controls, every twelve months for the duration of the DPA. The terms of the DPA have now been met and the DPA is now concluded.
A self-report was made following an investigation by the company of an issue which had come to light at the end of August 2012 as a result of the company's implementation of a compliance programme. The subsequent report by Sarclad's law firm was delivered to the SFO in January 2013, after which the SFO conducted its own investigation.
74 contracts were investigated (28 considered "implicated" and 46 considered "suspicious"), covering countries such as China, Korea, India and Taiwan. Evidence was found of payments to agents that were agreed outside the "percentage of contract value" basis expressed in the agency agreements.
Legal documents released this week show various requests from agents for money in order to secure contracts. In one example, a Korean-based agent asked Sarclad staff: "Will please Sarclad pay for the following costs which is essential for successful contract?
"Under-the-table cost (typical and important Korea) 9,000 euro
"Travel costs to take client to China as well as to England 14,000 euro
"Total 23,000 euro
"These expenses will be spent by Korean agent for clients to secure the contract."
Michael Sorby, Adrian Leek and David Justice were acquitted of conspiracy to corrupt and conspiracy to bribe.
Sarclad website
Images: Sarclad
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