Sweett admits bribery offence

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Consultant expects SFO prosecution as it announces it will exit the Middle East

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Consultant Sweett Group has announced it expects to be prosecuted by the Serious Fraud Office following an investigation by the bribery watchdog into historic allegations of bribery related to the firm鈥檚 Middle East division.

In an update to investors this morning, the firm also disclosed it has decided to exit the Middle East and restructure into five new divisions, as it posted an increased half-year pre-tax loss of 拢548,000 for the six months to September 2015.

Sweett said the Serious Fraud Office鈥檚 (SFO) investigation into the firm - prompted by bribery allegations first published in the Wall Street Journal in June 2013 - was 鈥渁t an end鈥�.

Sweett said that during its own investigations, 鈥渢wo related contracts within the Middle East were identified as suspicious and were duly reported to the SFO鈥�. These contracts were 鈥渆ntered into in 2013鈥�, the firm鈥檚 chief executive Douglas McCormick said.

This led to an admission by Sweett of an offence under section 7(1) of the UK鈥檚 Bribery Act 2010 - 鈥渇ailing to prevent an associated person bribing another to obtain or retain business for the company鈥�.

The firm said a subsequent prosecution is 鈥渆xpected鈥�, with the likely outcome of a fine, 鈥渢he quantum of which cannot be ascertained at the present time鈥�, but added: 鈥淚mportantly, an offence under Section 7 (1) does not attract a mandatory debarment from public sector tendering under EU/UK law.鈥�

The original allegations reported in the Wall Street Journal in June 2013 were that in 2010 a Sweett executive told an architect at US-based practice HLW hoping to work on a hospital project in Morocco that his company would have to pay 3.5% of the value of the contract to an official at the client to win it.

It is not clear in what way Sweett鈥檚 admissions to the SFO are related to the original Wall Street Journal allegations, if they are at all.

McCormick said: 鈥淭oday鈥檚 announcement brings closure on the Middle East legacy issues a step closer, allowing the Group to progress unencumbered in the future. This is an important next step in the strategic turnaround of the business.鈥�

The update on the SFO investigation came as Sweett Group posted an increased half-year pre-tax loss of 拢548,000, increased from 拢59,000 the previous year. Revenue increased 9% to 拢30.2m, up from 拢27.8m

The loss was down to 拢0.8m of losses in the Middle East and North Africa, leading the firm to announce it will exit the region 鈥渁s soon as practicable鈥� and said 鈥渧arious options鈥� were being considered.

Sweett sold its Asia Pacific business for 拢9.3m in cash to Currie & Brown in October, outside of this financial period, resulting in net debt reducing from 拢10.5m in September to 拢4m.

Sweett said its 鈥渇uture focus鈥� will be on its UK and European businesses which are profitable, cash generative and have strong market positions and North America.

The firm has been restructured into five new businesses, four of which have been given new managing directors, with a North America boss still to be appointed.