UK: Ex-Innospec CEO admits bribery charges
On 11 June, Paul Jennings, the former chief executive of US chemicals company, Innospec, pleaded guilty to two counts of bribery before Southwark Crown Court. The charges relate to the alleged bribery of public officials in Indonesia and Iraq, which were paid in return for lucrative contracts. Jennings' plea follows his agreement to pay $230,000 in settlement of related claims brought by the US Securities and Exchange Commission.
Dennis Kerrison and Miltiades Papachristos, two other former senior executives, pleaded not guilty to one count of conspiracy to corrupt.
The UK charges are the latest in a series of international investigations and prosecutions. In 2010 Innospec admitted that from 2002 to 2008 it had paid millions of dollars in bribes, to secure contracts for the supply into Indonesia and Iraq of a fuel additive which had been phased out of many countries owing to health and environmental concerns.
The prosecution is being closely followed by commentators, following the unusual plea bargain agreement between Innospec and prosecuting authorities, which was heavily criticised at the time. UK and US anti-fraud authorities jointly began investigating Innospec's dealings in 2005, as Innospec was registered in the US state of Delaware, but the Indonesian bribes were authorised from the company's offices in Cheshire. Both UK and US prosecuting authorities reached a plea agreement in 2010, under which the company paid fines of £8.2million ($12.7million) in the UK, and $27.5million in the US. The level of the UK fine was criticised by the judge ruling on the prosecution of the company, who deemed it "wholly inadequate" and, whilst upholding the negotiated agreement in this instance, stated that the Serious Fraud Office should not make such an arrangement again.
The admission by Jennings follows the convictions of other former executives of the company. On 17 January David Turner, a former sales and marketing director, pleaded guilty to corruption charges at Southwark Crown Court, and is awaiting sentencing. In the US, Ousama Naaman, Innospec's agent in Iraq, was sentenced in December 2011 to 30 months in prison for his role in the corrupt deals.