Guest Post by Finance Man
It was reported that Standard Bank Group Limited will have to pay UK and US regulators $37 million, which is R532 million in fines after its global markets business, ICBC Standard Bank PLC failed to prevent bribery by two Stanbic Bank Tanzania executives.
In February of 2015, ICBC acquired 60% of Standard Bank PLC ordinary shares.
Standard Bank Group protected ICBC in terms of the sale against the cost of such resolutions and is then liable to pay the fines.
The fines have come about due to the Deferred Prosecution Agreement that was entered into with the United Kingdom Serious Fraud Office. This suspends a prosecution and withdraws it after three years in exchange for penalties.
The lawyer acting for SFO, Edward Garnier has said that the case is connected to a $6 million bribe that is related to a private placing of sovereign notes to raise funds for the government of Tanzania.
Standard Bank has said that they disclosed the issue to the SFO in 2013 and assisted in the investigations.
Stanbic also ensured that the events were disclosed to the relevant authorities in Tanzania and has also cooperated with the investigations.
SFO has not indicated that anyone in Standard Bank Plc knew the intentions of the two Stanbic employees.
Standard Bank Plc have agreed to pay a penalty of $16.8 million, which is R241.8 million and this includes a 1/3 reduction for the self-disclosure and co-operation. They will also have to pay $7.05 million, which is R101.5 million in compensation to the Government of Tanzania as well as $8.9 million, which is R128.1 million to refund profits that are related to the transaction and expenses that are related to the investigation.
However, they did not disclose the bribery to the US investors and have agreed to pay the United States Securities and Exchange Commission $4.2 million, which is R60.6 million.