The Serious Fraud Office has been asked to reopen its controversial “plea deal” investigation into London-based ICBC Standard Bank after claims the SFO were misled by the bank.
The bank paid nearly £22m after admitting it failed to prevent bribery by two bankers at a sister firm. The deal, sanctioned by a High Court judge, was the first time the SFO had used its powers to strike a deferred prosecution agreement (DPA).
The court heard two officials at a former sister company of the London bank paid $6m (£3.9m) to a third-party in Tanzania to help secure a deal for the bank to raise £400m for the Tanzanian government. It later emerged the company the $6m was paid to was owned by two senior Tanzanian government officials (one of who was no longer working for the government). Despite a risk of corruption, “inadequate and ineffective” checks were carried out. When the $6m was withdrawn in cash over four days, the bank and its legal advisers reported the matter to the SFO.
The DPA deal meant the bank escaped prosecution in return for a financial penalty and the promise it will improve its anti-crime rules and enforcement and not re-offend for three years. DPA deals have been criticised for letting those responsible off the hook, and failing to deter bribery and corruption, particularly in developing countries. Tanzania is still repaying the expensive Standard Bank deal.
However, David Green, the SFO’s director, has now been asked to reopen the investigation, after claims by a former senior bank official in Tanzania that officials in London were “well aware” what was going on but “suppressed key facts” to help it secure the SFO deal.
The petition comes as it was revealed that a former banker involved in the original controversial deal is suing ICBC Bank and Stanbic Bank, its former Tanzanian subsidiary, for $30m for “ruining her banking career and any other finance-related business”. Shose Sinare, the former head of investment banking at Stanbic Bank, claims the bank secured the DPA by “suppressing key facts.” In legal documents seen by The Independent she claims the bank wrecked her career by alleging she participated in the bribery scheme.
She claims the Standard Bank misrepresented the fact it was not aware of a local third party involvement in the deal insisting it was well aware before signing the deal and that a draft collaboration document had been circulated to the entire deal team including senior officials in London.
According to the writ Standard Bank told the SFO she resigned from her position to avoid co-operation in an internal investigation by them. It claims she co-operated fully both before and after she resigned. She insists she only quit her job in protest at the way “she was victimised and/or treated for a decision made by Standard Bank”.
She continued to help even after quitting and was even flown to Standard Bank’s offices in South Africa to assist them. She claims that during one meeting a very senior bank official told her “it was essential that the bank is not in any way implicated in the allegations of, or impression of bribery because if it was it would lose its banking licence in the UK; or forced to refund investors the entire $600m and/or lose a very important transaction with the ICBC of China, which was negotiating to sell its business in London.”
The bank’s internal investigation report implicated her in the bribery report but did not give her an opportunity to see the allegations or respond to them she claims. Ms Sinare is reported to be facing investigation in Tanzania.
More than a 1,000 people including senior Tanzanian church and political figures have signed a petition calling for the SFO to reopen the investigation.
Kapinga Kangoma, a London-based activist with Tanzania’s ruling political party, said Tanzanians needed to learn the full truth about the allegations. “Corruption has caused huge problems for our citizens and we need to know the perpetrators are going to be brought to justice.”
The SFO said in a statement: "The SFO conducted an independent investigation into the matters self-reported to us by Standard Bank Group. We have now concluded the case into those matters that fall within the UK’s jurisdiction
"The SFO can and does provide mutual legal assistance (MLA), this includes assisting overseas authorities to investigate and prosecute bribery and corruption. Any request for assistance in this case can be made to the UKCA who will consider it and if appropriate refer it to the SFO.
"We cannot comment on third party litigation."
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