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Sweett Group to pay £2.3m after Middle East bribery sentencing

  • Sweett fined more than £1m under Bribery Act
  • Investigation uncovered illegal payments to secure contracts
  • Group chief executive says Middle East legacy issue ’is closed’

Sweett Group has been forced to pay more than £2.3m over bribes paid by its Middle East subsidiary to a local businessman to secure contracts on a luxury Dubai hotel.

The firm was fined £1.4m under the Bribery Act and was ordered to pay an additional £851,000 in confiscated profits as well as costs of £95,000.

The fine was imposed following a year-long investigation by the Serious Fraud Office, which uncovered illegal payments made by Sweett Group subsidiary Cyril Sweett International (CSI) to Khaled Al Badie.

Bogus payments had been made by CSI to Mr Al Badie’s North Property Management company to help secure consultancy contracts from Al Ain Ahlia Insurance (AAAI) for a £63m hotel development, the probe found.

Southwark Crown Court heard how a senior executive at CSI later tried to convince AAAI to write a letter claiming that the money amounted to a “finder’s fee” for Mr Al Badie.

In his sentencing, Judge Martin Beddoe pointed to two reports from KPMG into governance at Sweett Group that “raised serious concerns about the way that CSI was operating”.

In March 2014, KPMG completed its review, saying that its findings were unsatisfactory and “required immediate attention”.

Sweett Group has undergone wholesale changes since 2013, when the incident took place.

In its half-year financial results covering the period to September 2015, the group revealed a pre-tax loss of £500,000.

This loss included £900,000-worth of expenses relating to the SFO investigation.

Revenue for the half year was £30.2m.

Sweett Group chief executive Douglas McCormick said: “Sweett Group’s Middle East legacy issue is closed and this marks an important step in the delivery of the company’s new strategy.

“Over the last year, the company has been transformed with the appointment of a new leadership team, which has successfully addressed key issues facing the business.

“The group has delivered on a number of strategic objectives including the sale of the [Asia-Pacific] and India business, resolution of the SFO investigation, withdrawal from the Middle East market and the re-organisation of the business into five regions.

“We have strengthened our internal systems, controls and risk procedures, and refined our strategy, focusing on profitability and cashflow. We are excited by the opportunities we see ahead in our core markets the UK, Europe and North America, and we look to the future with confidence.”

A spokesman for Mr Al Badie said he “strongly denies any wrongdoing”.

He added: “Any engagement [with Sweett Group] was under a properly constituted legal contract.

“Mr Al Badie has not been interviewed or indeed approached by the SFO. He has no knowledge of the motivation behind the agreement between Sweett Group and the SFO.”

SFO director David Green CB QC said: “Acts of bribery by UK companies significantly damage this country’s commercial reputation.

“This conviction and punishment, the SFO’s first under section 7 of the Bribery Act, sends a strong message that UK companies must take full responsibility for the actions of their employees and in their commercial activities act in accordance with the law.”

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