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Standard Bank hit with R500m in fines on bribery charges

Failed to prevent bribery in Tanzania.

JOHANNESBURG – Standard Bank Group Limited will pay UK and US regulators $37 million (R532 million) in fines after its global markets business, ICBC Standard Bank Plc failed to prevent bribery by two Stanbic Bank Tanzania executives.

The Industrial and Commercial Bank of China (ICBC) acquired 60% of Standard Bank Plc’s ordinary shares in February 2015. In terms of the sale, Standard Bank Group indemnified ICBC against the cost of such resolutions and as such is liable to pay the fines – amounting to some R532 million – in full.

The fines are a function of a Deferred Prosecution Agreement (DPA) entered into with the United Kingdom Serious Fraud Office (SFO), which in effect suspends a prosecution and withdraws it after three years in exchange for penalties.

“This DPA relates to allegations that SBPlc failed… to prevent two executives of Stanbic Bank Tanzania Limited from engaging a local partner with the intent that the engagement would induce Tanzanian government representatives into acting partially in awarding a capital raising mandate to SBPlc and Stanbic,” Standard Bank said in a statement on Monday.

Edward Garnier, the lawyer acting for the SFO, told Bloomberg that the case is connected to a $6 million bribe related to a private placing of sovereign notes to raise funds for the government of Tanzania.

Standard Bank said that the Group and Standard Bank Plc self-disclosed the issue to the SFO in April 2013 “within days of it coming to their attention” and assisted in full in the investigations.

“The Group and SBPlc commissioned the international law firm, Jones Day, to conduct an unrestricted, comprehensive investigation and reported the resulting findings in full to the SFO,” Standard Bank said. “Stanbic in turn ensured that the events were fully disclosed to the relevant authorities in Tanzania and has cooperated fully with all investigations.”

The SFO has not made any allegations that anyone within SBPlc knew of the intentions of the two Stanbic employees, according to Standard Bank.

This is the first time a Standard Bank entity has been investigated for bribery or corruption.

SBPlc has agreed to pay a penalty of $16.8 million (R241.8 million), which includes a one third reduction for the self-disclosure and co-operation. SBPlc will also pay $7.05 million (R101.5 million) in compensation to the Government of Tanzania and $8.9 million (R128.1 million) to refund profits related to the transaction and expenses related to the investigation.

For not disclosing the bribery to US investors, SBPlc has agreed to pay the United States Securities and Exchange Commission (SEC) $4.2 million (R60.5 million) to resolve a claim that it acted negligently.

Standard Bank’s share price was down 1.72% to R130.86 in late trade on Monday.

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So what’s wrong here? When will the world realise there are two rule books in Africa north of the Limpopo, just as there are two rule books in this country. The book of rules for some that are allowed to overtake over solid lines and blind rises. The book that says for some corruption, bribery and stealing tax payers funds is ok, catch up time. Then there is the rule book for other law abiding citizens. so what’s the problem here, this is how you do business in Africa, ask MTN and I am sure a host of other companies doing business in Africa, it just has not come out yet…………………….Jacko where are you? come clean up!!!!!

My view, Certain Bankers are legalised crooks.

• Banks have been hitting the headlines the last couple of years for all kinds of collusion and fraud. Banks internationally and locally were fined billions for their fraudulent operations but nobody went to jail for fraud!

• Banks seems to be doing anything for money, and Investec walked away with R 2 bn from Brett Kebble’s shady business empire, according to a Barry Sergeant article in the latest Noseweek.

• Investec (and two other banks) entered into a ‘’naked gold swap’’ agreement with JCI (Western Areas) in 2001, and did nothing to assist/advice JCI , when the gold price started to rise and all the mark to market reports, that they were running in their middles office, confirmed that this toxic naked hedge would incur ‘’unlimited losses’’ for the Western Areas book. I think this was a very easy picking for them as they knew ”that Kebble was almost down and out” and that would one day walk ”away with the farm”, in the fashion that they did!

All South African Regulatory Authorities answerable should do, is take a fork to Standard Bank’s cooked chicken and stick a fork in it. The question is, will they?
Are they even reviewing this judgement and thinking: ‘standard bank has a lot of explaining to do, and we need our own share of the criminal proceeds’? Or as usual, they are using the Mpshe doctrine, ‘a scumbag for sure, but my scumbag nevertheless; and frankly, I don’t care what s/he did, I can see nothing wrong here.’ Regulatory authorities should be all over this like white-on-rice, I mean the UK and US authorities have this chicken already roasted and served, all SA has to do is stick a fork in it. Don’t hold your breath though.

we should be asking why wasnt peter whartonhood postion filled?(he was never ever needed)
jobs for pals at this bank- esp if you white.

Rotten to the core- peter whartonwood postion was never filled why? he was never supposed to be there-jobs for pals.

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