Two former directors of the British engineering company Mabey & Johnson (M&J) were found guilty yesterday of making illegal kickbacks to Saddam Hussein's government in Iraq to secure a €4.2m (£3.6m) bridge contract.
Charles Forsyth and David Mabey were convicted at Southwark Crown Court, south London, of handing €420,000 in illegal payments to the Iraqi government between 2001 and 2002 in breach of United Nations sanctions. The payments were made to secure a contract to supply the country with 13 steel bridges. Forsyth, who was M&J managing director at the time, and former chairman David Mabey will be sentenced later this month.
Mabey's lawyer responded to the verdict, saying his client was "surprised and profoundly disappointed," adding he was "personally unaware of any breaches of UN sanctions against Iraq". He plans to appeal.
The company itself had already pleaded guilty to breaching UN sanctions and other offences in September 2009. Richard Gledhill, a sales executive at the group, had also admitted his involvement, pleading guilty at an earlier hearing, and gave evidence for the prosecution in the trial of Forsyth and Mabey.
M&J specialises in making steel modular bridges and exported the structures to Iraq until the invasion of Kuwait, when sanctions were imposed on the country. The lucrative market was potentially reopened to the UK company with the Oil-for-Food programme, which allowed Iraq to export crude oil in return for humanitarian goods and certain infrastructure contracts.
To win the bridge contract, the group agreed to pay the Iraqi government 10 per cent of the contract's value upfront, a payment described as a "commission" to M&J's local representative Upper Gulf Agencies. To avoid losing out following the kickback, the company simply raised its prices.
The Serious Fraud Office (SFO), which investigated the company, said Gledhill had negotiated the €4.2m contract and had received approval from Forsyth and Mabey. It was signed in Baghdad in May 2001.
The wrongdoing came to light in 2003, after the US-led invasion of Iraq. The UN established an Independent Inquiry Committee which reported on the manipulation of the Oil-for-Food programme in 2005, and passed those findings onto the UK authorities.
The SFO launched an inquiry in 2007 and Mabey & Johnson was charged two years later. The company admitted the charge, as well as corruption offences in Jamaica and Ghana, and was fined £2m.Reuse content