Wednesday, August 26, 2009

Fraud cops probe UK overseas deals

The Serious Fraud Office (SFO) is phone-tapping and placing firms under surveillance as it targets UK contractors it suspects of being involved in fraud overseas.

The news comes as the SFO makes the industry a priority, after its involvement in a string of construction-related cases.

The SFO has assisted the OFT in its bid-rigging work, prosecuted Mabey and Johnson for overseas corruption and recovered ВЈ2.25m from Balfour Beatty for financial irregularities on a project in Egypt.

Now it plans to send a letter to major contractors on 1 September, reminding directors of their responsibilities, Contract Journal has learned.

The letter also warns that the proposed Bribery Bill, which aims to make it a criminal offence to give or offer a bribe in the UK or abroad, "will have a very significant impact if it is enacted".


Fraud cops probe UK overseas deals


SFO director Richard Alderman confirmed the organisation was focusing on contractors and has had "reports in relation to fraud concerning the construction industry in the UK."

He added: "We have put a lot of resource into anti-corruption and are building the team up to 100 people, as well as having recruited an experienced head of construction.

"We are looking at using more intrusive powers and have the powers for telephone intercepts and surveillance. There are some cases where we are doing it."

The letter is seen by the SFO as giving contractors a chance to discuss any concerns they may have and toughen up their defences, but also serves as a warning.

"I'm very interested in finding out who could have reported but didn't," Alderman said. "If that happens I want to consider taking them through the criminal process."

UKCG director Stephen Ratcliffe said that contractors were already observing good practice.

He added: "It's not dissimilar to the OFT investigation. It's not a defence for directors to turn a blind eye and members are aware of this.

"UKCG will hold a series of seminars in the autumn to familiarise contractors with the mechanisms they need to have in place to conform."

в—Џ Two leading trade bodies launched a code of conduct last week to prevent contractors running into further trouble with competition watchdogs.

The National Federation of Builders and UK Contractors Group have jointly launched the code in the wake of the Office of Fair Trading investigation into price fixing in the industry.

The code highlights the need for construction companies to have rigorous internal procedures to prevent anti-competitive practices.

For those companies that have not yet established internal compliance regimes, the code will be backed up with guidance and training.

The code was launched ahead of a decision on fines in September following the OFT probe.

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