Settlements

ST-514
Standard Bank
Standard Bank
United Kingdom
Serious Fraud Office
Tanzania
2015
11/30
United States
Legal Person
Criminal
Deferred Prosecution Agreement
Compensation (to Tanzania), Disgorgement of Profits, Financial Penalty, Legal Costs
$32,742,222.58
$16,800,000
NA
$8,400,000
$7,046,197
$496,026
$7,046,197
Compensation to Tanzania (US$6 million and $1 million in interest)
Art.16
Art. 1, Art. 2
Failure to Prevent Bribery
Failure to Prevent Bribery
Yes
According to the UK Crown Court Judgment, "the Government of Tanzania wished to raise funds by way of a sovereign note private placement. Stanbic Bank Tanzania Ltd (“Stanbic”), which is a subsidiary of Standard Bank Group Ltd (a publicly owned company registered in South Africa), was not licensed to deal with non-local foreign investors in the debt capital market and so Stanbic involved Standard Bank, another subsidiary of the same group that was licensed, and together they sought to obtain instructions to raise the funds. Negotiations did not progress until Stanbic entered into an agreement with a Tanzanian company called Enterprise Growth Market Advisors Limited (“EGMA”). 7. Two of the three directors and shareholders of EGMA were the Commissioner of the Tanzania Revenue Authority (and, thus, a member of the Government of Tanzania) and the former Chief Executive Officer of Tanzanian Capital Markets and Securities Authority (“CMSA”). EGMA’s fee was agreed at 1% of the funds raised and in order to meet the cost of that agreement, the fee for the placement was increased from 1.4% to 2.4%. In the event, although the potential for corrupt practices to affect this type of business were well known, Standard Bank, which did not have adequate measures in place to guard against such risks, relied on Stanbic to conduct appropriate due diligence in relation to EGMA; Standard Bank made no enquiry about EGMA or its role. 8. The mandate to raise the funds was placed with Standard Bank and Stanbic and US $600 million was raised but there is no evidence that EGMA provided any services in relation to the transaction. Meanwhile, EGMA had opened a bank account with Stanbic and its fee of US $6 million was paid (as agreed) via Stanbic into the account. Very shortly thereafter the vast majority of the sum had been withdrawn in cash. The withdrawals excited the concern of staff at Stanbic who referred the matter to the head office of Standard Bank Group Ltd; Standard Bank were alerted and very quickly thereafter, a law firm was appointed to investigate the matter and, within three weeks of the first report, both the Serious and Organised Crime Agency and the SFO were informed." The Judgment also makes note of Standard Bank's settlement with the US Securities and Exchange Commission. (Source: Judgment in Between : SERIOUS FRAUD OFFICE Applicant - and - STANDARD BANK PLC (Now known as ICBC Standard Bank plc), Case No: U20150854, Crown Court (Queen's Bench Division), November 30, 2015.)