This article was reprinted with permission from FCPA Professor
Scrutiny alerts, coming clean, coming off a monitor, and for the reading stack. It’s all here in the Friday roundup.
This previous post, regarding the arrest and charging of Frederic Cilins for obstruction of justice in connection with an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea, highlighted that while Cillins has been associated with BSG Resources, the charging documents make clear that BSG is not the sole focus of the U.S. investigation.
Earlier this week, Houston-based Hyperdynamics Corporation issued this release. It states:
“[On] September 2013 [the company] received a subpoena from the United States Department of Justice (DOJ) requesting that the Company produce documents relating to its business in Guinea. In 2006, a Production Sharing Contract was signed by the Company and the government of Guinea granting rights to an oil and gas concession offshore Guinea. The Company understands that the DOJ is investigating whether Hyperdynamics’ activities in obtaining and retaining the concession rights and its relationships with charitable organizations potentially violate the U.S. Foreign Corrupt Practices Act or U.S. anti-money laundering statutes. The Company has retained legal counsel to represent it in this matter and is cooperating fully with the government. The Company is unable to predict when the investigation will be completed, what outcome may result and what costs the Company will incur in the course of the investigation.”
On the day of Hyperdynamics disclosure, the company’s stock fell approximately 15%. As sure as the sun rises, a few days later, not one but two, plaintiffs firm issued releases (here and here) announcing an “investigation.”
As noted in this article, “French prosecutors have opened a preliminary enquiry into allegations that a subsidiary of construction firm Vinci bribed officials in Russia [...] to win the contract for a toll motorway linking Moscow to Saint Petersburg.” Vinci has American Depository Receipts that are traded on a U.S. exchange.
This previous post highlighted the employee amnesty program created by SNC-Lavalin (a Canada-based engineering and construction company mired in a bribery and corruption scandal concerning projects in Bangladesh and certain countries in Africa). The company recently announced as follows.
“A total of 32 employees made amnesty requests. While no new information of a material nature was revealed, the information the Company received did confirm its previous assessment of corruption risks.”
The release also highlights other compliance enhancements and policies and procedures the company has implemented.
Coming Off a Monitor
In August 2010, Alliance One International resolved an FCPA enforcement concerning conduct in Kyrgyzstan and Thailand by agreeing to pay approximately $9.5 million (see here for the prior post). Even though Alliance One’s entire exposure was based, not on anything it did, but rather successor liability theories and even though the enforcement action was the product of a voluntary disclosure, the non-prosecution agreement required the company to engage a corporate monitor for a three-year period.
In this recent release Alliance One stated:
“On September 30, 2013, the Company fulfilled its obligations under its settlement agreements, including the successful and on-time completion of its compliance monitorship. On May 7, 2013, the Monitor filed his third and final of his required reports with the DOJ and the SEC. In the third report, the Monitor evaluated the long-term sustainability of the Company’s compliance program, in addition to risk-based themes and the implementation of recommendations from previous years. The Monitor concluded the third report by certifying that the Company’s Compliance Program, including its policies and procedures, is reasonably designed and implemented to detect and prevent violations of anti-corruption laws within the Company. The final report also states that all recommendations of the Monitor have been fully implemented by the Company. As per the schedule set forth in the aforementioned settlement agreements, the monitorship formally ended on time on September 30, 2013, and without any extensions of that date by the Monitor, the DOJ or the SEC.”
In the release, Alliance One President and CEO J. Pieter Sikkel stated:
“Over the past three years we have built a world-class compliance program supported by strengthened systems, policies, procedures and controls that address a variety of compliance areas. While the completion of the monitorship is an important milestone, our strong commitment to operating ethically and compliantly will continue indefinitely.”
Joe Warin (Gibson, Dunn & Crutcher) was the monitor. See here for a previous post concerning an article Warin and his colleagues wrote titled ““Somebody’s Watching Me: FCPA Monitorships and How They Can Work Better.”
Much has been written in connection with GlaxoSmithKline in China about the arrest and detention of Peter Humphrey and his wife based on accusations in the course of background checks performed by their Shanghai-based firm ChinaWhys.
In a similar instance, this recent article in Barron’s profiles the plight of Canadian stock analyst Kun Huang has been locked up in China for more than a year for exposing alleged improper conduct concerning Silvercorp Metals. According to the article, “Canadian authorities have opened a bribery probe based on [Huang's] allegations.”
A good weekend to all.
Read more articles on the FCPA by Mike Koehler at FCPA Professor.
For more information about LexisNexis products and solutions connect with us through our corporate site.