UK Case Mabey & Johnson Ltd. Continues to Set Anti-Corruption Enforcement Precedent
By THE GLOBAL COMPLIANCE & DISPUTES PRACTICE
On January 12, 2012 the UKs Serious Fraud Office announced that it would recover £131,201 (roughly USD $200,000) in dividends paid to the shareholders of M&Js parent, Mabey Engineering (Holdings) Ltd., that were derived from the subsidiarys illicit activities. The High Court of Justices order to disgorge the share dividends marks the end of a case that began with M&Js self-referral to the SFO in early 2008 and the first time that the SFO has compelled a parent company, rather than the company itself or individuals responsible for its management, to forfeit profits under Part V of the Proceeds of Crime Act of 2002 . Comments by Richard Alderman, the Director of the SFO, indicate that the SFO plans to leverage this power broadly to recover shareholder dividends resulting from corrupt activities, which could have far-reaching implications for institutional investors in UK companies worldwide.