UK company fined Sh330 million for bribing Kenya officials

Monday January 11 2016

Former Kenya National Examination Council CEO Paul Wasanga in a past function in 2013. Mr Wasanga was alleged to have received money to award contract for printing exam certificates. Court papers say the former IIEC CEO James Oswago placed order for ballot papers and that payment included bribes for poll officials. PHOTO | EVANS HABIL | NATION MEDIA GROUP

Former Kenya National Examination Council CEO Paul Wasanga in a past function in 2013. Mr Wasanga was alleged to have received money to award contract for printing exam certificates. Court papers say the former IIEC CEO James Oswago placed order for ballot papers and that payment included bribes for poll officials. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

By AGGREY MUTAMBO
More by this Author

A London Court has ordered a British printing company convicted of bribing Kenya officials to win security printing contracts to pay a Sh330 million (£2.2 million) fine.

Kenyan authorities remain stuck with little headway made in local investigations and with no one charged over the matter to date.

On Friday, the Southwark Crown Court in London ruled that Smith and Ouzman Ltd should pay the fine after being found guilty of bribing officials in Kenya and Mauritania with £395,074 (Sh59.3 million) to earn printing contracts.  

It was an additional fine that follows the jailing of the company’s former directors last February after they were found to have had a hand in the bribery scandal.

“Corruption of foreign officials is damaging to the country in which the corruption occurs, is damaging to the reputation of UK business and of course in the market in which a business operates. It is anti-competitive,” Mr Andrew Mitchell QC, the judge who heard the case, said when handing down the verdict.

The British firm, which specialises in security documents such as ballot papers and examination certificates, was convicted in December 2014.

CONFISCATION ORDER

The court fined the company £1,316,799 (Sh197.5 million) as well as £881,158 (Sh132 million) to satisfy a confiscation order applied for by the Serious Fraud Office and £25,000 (Sh3.8 million) in costs, to be paid in instalments every six months for five years.

In British law, a confiscation order is usually made to have proceeds of crime be surrendered. If the firm fails to pay the order within 28 days, authorities could confiscate its property.

In February 2015, two former directors of the company, Nicholas Charles Smith, 43, and his father, Christopher John Smith, 71, were jailed by the London court.

Judge Daniel Pearce-Higgins sentenced the younger Smith, a former Sales and Marketing Director for the firm, to a three-year in prison for conspiracy to bribe officials of the defunct Interim Independent Boundaries Commission and the Kenya National Examinations Council bosses to earn printing contracts.

His father, who was then chairman of the company was handed an 18-month suspended term for his role in the scandal in which officials are said to have pocketed millions in bribes known euphemistically as “Chicken”.

EACC INVESTIGATIONS

Since 2010, the Serious Fraud Office, had been investigating the case since of payments said to have been made between November 2006 and December of 2010.

Back in Kenya, the Ethics and Anti-Corruption Commission, the agency charged with investigating the matter, has often asked for more time, even announcing it was awaiting evidence from the SFO.

Top on the list of those who received bribes from Smith &Ouzman include Interim, Independent Electoral Commission commissioner Davis Chirchir and CEO James Oswago and former Kenya National Examinations Council (Knec) boss Paul Wasanga, according to court filings.

The IIEC was later disbanded and its role taken over by the Independent Elections and Boundaries Commission (IEBC).

The EACC has questioned all of them on their role in the scandal, but is yet to complete investigations.

On Friday last week, the London court ordered that Nicholas Smith pays £18,693 (Sh2.8 million) within two months or his property will be confiscated. He was also ordered to pay £75,000 (Sh11.3 million) in legal costs within nine months. His father on the other hand was directed to pay £4,500 (Sh675,000) to or his property would be confiscated within seven days and legal costs of £75,000 (Sh11.3 million) within three months.

“The bribery of foreign officials by UK companies damages this country’s reputation, commercially, politically and ethically. The SFO will pursue such criminal behaviour at both the corporate and individual level,” said Serious Fraud Office Director David Green, in a statement.

On Saturday, the company said it would accept to pay the fine and is conducting a review of its business operations to avoid a repeat.

“We have taken this matter very seriously and learnt many lessons during this difficult time.  We have demonstrated our commitment, controls and ethos to new and existing customers and are grateful to all of them for continuing to trust in us,” current Chairman Phil Ouzman said. “The company has a substantial financial penalty to pay.  Although this is a significant amount of money, the company is resilient and, with the help of our dedicated employees, we will continue to deliver the highest level of secure, innovative products and services.”