Reprieve for Oxford Press’s regional units as World Bank lifts sanctions

The World Bank has finally lifted sanctions on two local subsidiaries of Oxford University Press accused of bribing officials to win government contracts to supply textbooks in East Africa. FILE PHOTO | TEA GRAPHIC |   NATION MEDIA GROUP

By SPECIAL CORRESPONDENT, The EastAfrican

In Summary

• Oxford University Press East Africa Ltd and Oxford University Press Tanzania Ltd had been slapped with a three-year ban for improper payments to government officials for two contracts to supply textbooks.
• The lifting of sanctions on the OUP subsidiaries comes as a relief to the publisher, as it can now fight for a piece of the region’s lucrative school books market, and thereby help to shore up earnings after reporting a drop in sales from Africa in the period ended March this year.
• The Nairobi-based OUPEA is the region’s largest publisher, supplying textbooks and other school books to neighbouring markets such as Burundi, Malawi, Rwanda, Sudan and Uganda. Oxford’s Tanzania unit covers the mainland and the island of Zanzibar.

The World Bank has finally lifted sanctions on two local subsidiaries of Oxford University Press accused of bribing officials to win government contracts to supply textbooks in East Africa.

Oxford University Press East Africa Ltd (OUPEA) and Oxford University Press Tanzania Ltd were in July 2012 slapped with a three-year ban during which the wholly-owned subsidiaries were barred from participating in World Bank-funded tenders.

READ: World Bank sanctions Oxford University Press over graft in East Africa

Also off the hook is Energo Uganda, a unit of Serbian civil engineering firm Energoprojekt Niskogradnja, which has completed its two-and-a-half year ban for fraudulent practices in a road project financed by the global lender.

“We can confirm that the sanctions have been lifted,” the World Bank said in response to queries by The EastAfrican.

The Bretton Woods institution has an anti-corruption and fraud investigation unit known as the Integrity Vice Presidency (INT), which is charged with investigating allegations of fraud, collusion and corruption in projects it funds.

The Nairobi-based OUPEA is the region’s largest publisher, supplying textbooks and other school books to neighbouring markets such as Burundi, Malawi, Rwanda, Sudan and Uganda. Oxford’s Tanzania unit covers the mainland and the island of Zanzibar.

“The two companies made improper payments to government officials for two contracts to supply textbooks in relation to two World Bank-financed projects,” the World Bank said in an earlier statement.

Britain’s Serious Fraud Office (SFO) said the corrupt dealings were in relation to education projects between 2007 and 2010.

SFO slapped OUP with a £1.9 million ($2.96 million) fine for the malpractices by its subsidiaries; OUP had to pay a further $0.5 million in restitution to the World Bank.

“OUP voluntarily reported itself to the agency after it became aware of the possibility of irregular tendering practices involving its education business in East Africa,” SFO said.

Off the hook

The lifting of sanctions on the OUP subsidiaries comes as a relief to the publisher, as it can now fight for a piece of the region’s lucrative school books market, and thereby help to shore up earnings after reporting a drop in sales from Africa in the period ended March this year.

“OUP has developed a robust compliance programme that will remain a key focus of our commitment to maintaining the highest ethical standards globally,” a spokesman at the British publisher, which is linked to the University of Oxford, said in an interview.

OUP is the largest university press in the world, churning out more than 6,700 new publications in the year to March, of which 1,700 were digital books.
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“A key factor in our performance in emerging markets was the drop in African revenues,” said Nigel Portwood, chief executive at OUP, in the publisher’s latest annual report.

The return to the market puts OUP’s local subsidiaries in a head-to-head battle with rivals including listed publisher Longhorn, Kenya Literature Bureau and the Jomo Kenyatta Foundation, for big-ticket education deals financed by the World Bank.

But while the regional subsidiaries may be off the hook, a number of companies and senior executives remain on the World Bank’s graft list, painting East Africa as a hotbed of corruption, where firms bribe or falsify records to clinch deals.

The World Bank lists malpractices such as bribery, fraudulent bids, fraud in implementation, collusion, coercion and obstruction among the common corrupt practices by companies appearing on its list of shame.

Uganda tops the list with Ayemo Investments Ltd together with its managing director Alex Opua both being blacklisted for five years for submitting false financial reports and two fake bank guarantee documents.

Allan Makabayi, as well as Babcon Uganda Ltd, are also barred from engaging in any World Bank projects for submitting four bids, each containing falsified financial documents, the World Bank said.

Fraud

BVS Construction Ltd and its managing director Jayaram Reddy are both serving a four-year ban for submitting fraudulent annual volumes of construction works and financial statements.

Broadway Engineering Services Ltd and its boss John Katende were in 2011 hit with a six-year ban for “making a number of misrepresentations” regarding its qualification to take part in a tender.

Kampala-based Vital Supplies and Logistics Ltd was barred in 2012 for bidding for projects with cooked books of accounts, and is still ineligible to take part in World Bank projects.

Kenya’s Reef Building Systems Ltd is serving a three year ban lapsing in 2016 for using a forged bid security for a tender under the Kenya Electricity Expansion Project.

In Tanzania, China Hunan Construction Engineering Group Corporation (CHCEGC) was sanctioned for two years ending September 2015 for submitting forged corporate experience documents.

Dar-based Mmk Project Services Ltd and its owner Munawer Khalfan were in 2014 slapped with a 5.5 year lockout from World Bank financed projects for paying bribes to Tanzanian officials to win tenders.

The firms have also been locked out of tenders by other multilateral agencies — African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank — under a cross-debarment arrangement meant to severely punish perpetrators of fraud.