Judge attacks SFO deal with Innospec

The Serious Fraud Office (SFO) was yesterday reprimanded by a Crown Court judge over a controversial plea bargain that saw the UK arm of chemicals group Innospec fined $12.7m.

Last week, the British division of Delaware-based Innospec admitted to paying bribes to Indonesian government officials between 2002 and 2006 to win contracts.

The group’s parent company had already agreed a trans-Atlantic plea bargain with the SFO and the Securities Exchange Commission and the Justice Department in the US. After two years of negotiations, the company pleaded guilty with fines set at $40.2m.

Speaking at Southwark Crown Court yesterday, Judge Lord Justice Thomas called Innospec’s corruption “systematic and large-scale”. Yet, he also said the SFO acted beyond its remit in securing the trans-Atlantic plea bargain, and the fine was “inadequate”.

The Judge concluded: “I have concluded that the director of the SFO had no power to enter into the arrangements made and no such arrangements should be made again.”

SFO director Richard Alderman said: “This has been a ground-breaking case involving a global settlement that the SFO has brought to the English courts.

“This is a very important decision which will guide the SFO in our approach to these matters in future,” he added.

Innospec, which makes fuel additives, employs 365 at its Ellesmere Port plant.