Last week the Serious Fraud Office took the innovative approach of using proceeds of crime legislation to recover dividends paid by Mabey and Johnson Limited to its parent shareholder, as we reported in this post. Mabey and Johnson had previously admitted corruption and breaches of UN sanctions.
This was the first time that the SFO has pursued dividends paid to shareholders who may be entirely unaware of the corrupt actions of the company paying the dividend. The SFO’s Director, Richard Alderman, stated his belief that institutional shareholders should “satisfy themselves” as to the business practices of the companies in which they invest. That provoked various comment that the SFO was adding to the governance burdens placed on institutional shareholders (see, for example, in the FT, “Fund managers should not have to police bungs abroad“).
“There are other cases we are looking at where we shall do this again”
In a speech yesterday at a Transparency International Anti-Bribery Training Launch (and see here for the free Bribery Act training materials made available at that launch), Mr Alderman reacted to this criticism and stressed his view that investors have a duty to engage with their investee companies on corruption and compliance issues: