UK firm faces asset seizure over Kenya bribery scandal

Corporate News

The EACC has postponed indefinitely a scheduled grilling of James Oswago (pictured), former CEO at the IEBC, and Trevy James Oyombra, S&O’s local agent. PHOTO | FILE 

By DAVID HERBLING, hdavid@ke.nationmedia.com

In Summary

• London’s Southwark Crown Court has set October 19 as the date when it will start hearings to determine what punishment Smith & Ouzman deserves for its involvement in the bribery of foreign government officials.
• UK’s anti-graft agency Serious Fraud Office (SFO), which prosecuted the bribery case, is seeking to confiscate the assets of S&O to prevent the family-owned printing firm from enjoying the ill-gotten wealth.

Smith & Ouzman, the London-based security printer whose executives were earlier this month sent to jail for bribing Kenyan election officials, will be back in court in October when proceeding to determine its own punishment starts. 

London’s Southwark Crown Court has set October 19 as the date when it will start hearings to determine what punishment the company deserves for its involvement in the bribery of foreign government officials.

“The sentencing of Smith & Ouzman [S&O] will not take place until confiscation proceedings have concluded. The first hearing for mention to deal with this is presently listed for 19 October 2015 at Southwark Crown Court,” the UK’s anti-graft agency Serious Fraud Office (SFO) said of the company that was convicted of corruption alongside its former executives.

Prosecutors have a range of options, including hefty fines and seizure of the printing firm’s assets — now partly seen as proceeds of crime — that were secured through payment of bribes codenamed ‘chicken.’

SFO, which prosecuted the bribery case, is seeking to confiscate the assets of S&O to prevent the family-owned printing firm from enjoying the ill-gotten wealth.

“The court will be presented with evidence on which it will be invited to make a judgment either for or against a confiscation order,” the SFO told Business Daily.

The confiscation proceedings are being made under The Proceeds of Crime Act (2002) that commence once an accused party has been convicted of serious offences such as bribery and corruption.

British law provides that S&O cannot be fined before conclusion of confiscation proceedings, which are also meant to help the court assess and measure the defendant’s means —which will be taken into account when imposing financial penalty.

Smith & Ouzman, founded in 1845, has an estimated annual revenue of Sh910 million ($10 million) from its specialised business of printing security documents such as examination and ballot papers.

READ: UK court sends ‘chickengate’ duo to prison for five years

S&O lists some of its top customers as the Independent Electoral and Boundaries Commission (IEBC), the Kenya National Examinations Council (Knec) and other government agencies.

Renewed efforts by the UK to bring its citizens to justice by attaching the assets of S&O once again casts serious aspersions on the integrity and resolve of Kenya’s Ethics Anti-Corruption Commission (EACC) and the Director of Public Prosecutions (DPP) office to bring the officials involved in the ‘chicken’ scandal to justice.

London has proved that indeed ‘chicken’ was paid out to Kenyan officials, but the EACC and the DPP have been unable to nail those who feasted on S&O’s ‘chicken’ in Nairobi.

The EACC’s reluctance to take the corruption bull by the horns comes even as the US Securities & Exchange Commission (SEC) on Wednesday revealed that top government officials pocketed more than Sh138 million ($1.5 million) in bribes from American tyre firm Goodyear Tire & Rubber Co. in order to award the company supply tenders.

READ: US watchdog says bribes paid to secure tyre contracts

The SEC has hit Goodyear with a Sh1.48 billion ($16.22 million) fine for engaging in corrupt practices abroad, but the recipients of the tyregate scandal in Kenyan parastatals, military and ministries continue to roam free.

Judge Daniel Pearce-Higgins a fortnight ago sentenced S&O executives Nicholas Smith (sales and marketing director) to three years in jail while his father, 71-year-old Christopher Smith (chairman) was handed a suspended jail term of 18 months and 250 hours of community service.

This was after the two were convicted of paying out ‘chicken’ totalling nearly Sh50 million (£349,057.39) meant to facilitate S&O win tenders at the defunct Interim Independent Electoral Commission (IIEC), the IEBC’s predecessor, and Knec.

The developments in London come a day after the EACC postponed indefinitely a scheduled grilling of Trevy James Oyombra, S&O’s local agent,  and James Oswago, former CEO at the IEBC.

Mr Oyombra, the chief chef of the ‘chicken’ feast according to the UK court papers, was the conduit through which S&O bosses in London would make the bribery payments. He would in turn discreetly pass on the bribes to electoral officials in Nairobi.

READ: Anti-graft body postpones grilling of Oswago, Oyombra

The anti-graft agency has quizzed IEBC chairman Issack Hassan, Energy secretary Davis Chrichir (former commissioner at IIEC) and former Knec boss Paul Wasanga on their role in the ‘chicken’ scandal.

Civil society groups have, however, dismissed the belated efforts by the EACC to summon those named in the scandal, which has ended up as photo ops outside Integrity Centre for the accused to plead their innocence.

The EACC has also maintained studious silence on why it has not lined up other members of the ‘chicken gang’ — including former Judiciary registrar Gladys Boss Shollei, (ex-deputy CEO at IIEC)  lawyer Kennedy Nyaundi (ex-commissioner), Kenneth Karani (senior procurement officer), an unnamed finance director and former Electoral Commission of Kenya commissioner Joseph Khamis Dena — for questioning.

The Knec executives who ate chicken include deputy CEO Mwai Nyaga, Geoffrey Gitogo (ICT manager), Ephraim Wanderi (computer manager) and Michael Ndua, the principal supplies officer.

An unnamed Kenya Bureau of Standards official is said to have received Sh2.92 million in kickbacks to certify S&O printing works as having met the required quality standards, documents filed in the London court showed.

The SFO said the ‘chicken’ conviction was the first time the agency had nailed a British firm for foreign bribery following a court process, given that most companies prefer to enter a plea bargain in return for concessions in the form of a modest fine.

Oxford Publishing Ltd was in 2012 ordered to pay £1,895,435 (Sh269.3 million) after it voluntarily reported to the SFO that some of its agents had paid bribes to Kenyan and Tanzanian government officials to win contracts to supply school books.