Proceeds of crime legislation allows Serious Fraud Office to target dividends received by shareholders
The Financial Times reports today that the Serious Fraud Office has won a civil recovery order against the shareholder of a company that admitted corruption. Mabey Engineering Holding has agreed to repay a £131,201 dividend it received from Mabey and Johnson Limited, which admitted corruption and breaches of UN sanctions in relation to work in Iraq.
This power of the SFO means that it is able to pursue dividends paid to shareholders who may be entirely unaware of the corrupt actions of the company paying the dividend.
The FT reports the SFO as emphasising that it will not hesitate to pursue third-party investors (which would include institutional or private equity investors) who receive dividends paid by listed companies which are convicted of illegal activity, and quotes the director of the SFO as stating that investors should be obliged to satisfy themselves as to the business practices of the companies in which they invest.
