First DPA negotiated with SFO

Standard Bank negotiated the Serious Fraud Office’s (SFO) first deferred prosecution agreement (DPA) in a comparatively favourable time but with no “leniency” on fines.

Standard Bank, now known as ICBC Standard Bank, was the subject of an indictment alleging failure to prevent bribery under the Bribery Act 2010. After securing a DPA, it will now pay US$25.2m in financial orders, plus £330,000 costs and a further US$7m compensation to the government of Tanzania. It will also co-operate fully with the SFO and be subject to an independent review of its procedures.

Jessica Parker, partner at Corker Binning, says: “What is clear from this DPA is that a self-reporting company will receive no special leniency (and is prohibited by statute from doing so) in relation to the financial penalties which it will incur.

“To those considering a similar resolution the real advantage will be the speed and agility in which this deal was reached. Solicitors for Standard Bank contacted the SFO in 2013. Two and a half years may seem a long time but it compares favourably to the length of a traditional investigation and prosecution, especially when you consider that as the first of its kind, negotiations must have been painstaking.

“The real coup for Standard Bank is that the first that the public heard about this investigation was when the formal agreement to the DPA was announced. The SFO routinely announces its investigations to the press and on its website.

“Such announcements lead to uncertainty for businesses, their staff, shareholders and customers. Commercially, the ability to conclude the investigation without the fear of regular progress reports being issued by the SFO or press interest must be of huge importance.”

However, Parker said this particular case was “relatively simple” and that DPAs remain unattractive in many ways, not least in the exposure to huge fines and costs but also, as will inevitably happen, the criminal prosecution of individual employees and directors. “In cases where a DPA is to be followed by a trial of the directors, the corporate will not benefit from the short sharp snap of bad publicity that has been achieved in this case.”