A Glenrothes cabling company has paid £212,800 under an agreed civil settlement, after reporting itself for failing to prevent bribery by a third party, the Crown Office announced today.
The agreement was reached under the self-reporting initiative set up by the Lord Advocate after the Bribery Act 2010 came into force in 2011. Companies that report instances of bribery in which they have been involved may escape prosecution if steps have been taken to avoid a recurrence and it is considered that the public interest does not require prosecution.
In the case just settled, Brand-Rex Ltd, a developer of cabling solutions for network infrastructure and industrial applications, which employs over 300 staff, operated an incentive scheme known as “Brand Breaks” for UK distributors and installers between 2008 and 2012. In return for meeting or exceeding sales targets, installers and distributors were eligible for varying degrees of rewards, including foreign holidays. The scheme was not in itself unlawful but an independent installer of Brand-Rex products offered his company’s travel tickets to an employee of one of his customers, an end user of Brand-Rex products. This went beyond the intended terms of the scheme, as the recipient was in a position to influence decisions as to which company they purchased cabling from, and personnel from this company and individuals connected to them used these tickets for foreign holidays in 2012 and 2013.
Brand-Rex became aware of the issue through an internal review and launched an extensive investigation conducted by external solicitors and forensic accountants. Following this, solicitors for the company were instructed to make a self-report to Crown Office in which Brand-Rex accepted that they failed to prevent this when they should have done.
This amounted to a breach of s 7 of the 2010 Act, which makes it an offence for a commercial organisation to fail to prevent bribery by an associated person. The case was deemed suitable for civil recovery settlement, the agreed sum being based on the gross profit of the company related to the misuse of the Brand Breaks scheme. The money recovered will be paid into the Scottish Government's CashBack for Communities fund.
The company has taken steps to implement new policies and training to ensure that no unlawful conduct will take place in the future.
Linda Hamilton, head of the Crown Office Civil Recovery Unit, said: “Bribery and corruption can distort business and harm legitimate economic development. Companies are responsible for ensuring that they do not allow their employees or contractors to secure any commercial advantage through bribery.
“In appropriate circumstances such as this, where companies accept that they have failed to prevent bribery and take steps to ensure that it will not occur again, the self-reporting initiative allows for a civil settlement rather than criminal proceedings.
“I would urge any companies who uncover any instances of bribery to notify the Crown Office as soon as possible.