The Serious Fraud Office has today (Friday 1 May) had a £10 million deferred prosecution agreement approved by the High Court - its first DPA in four years.
Ultra Electronics Holdings Ltd (previously PLC), a British defence and security company, accepted it did not have adequate procedures in place to identify and mitigate bribery. The company will pay a £10m penalty as part of its DPA agreement with the agency.
Both the penalty and £4.8m in SFO investigation costs must be paid by Ultra Electronics Holdings within 30 days.
The agreement requires Ultra Electronics Holdings to meet various conditions, including providing annual reports to the SFO for the next three years demonstrating the effectiveness of its anti-bribery and compliance programme. The company must ‘demonstrate genuine and sustained reform under the scrutiny of the court’.
During the short public portion of the hearing, Mr Justice Hilliard, sitting in the Royal Courts of Justice, said he had refused an application for anonymity. The DPA was ‘in the interests of justice and the terms are fair, reasonable and proportionate’, he said.
The SFO announced its investigation into the company in April 2018 over suspected offences of corruption relating to conduct in Algeria. Then, in 2024, the investigation was extended to all jurisdictions in which the company operated.
Ultra Electronics now operates under new leadership. The DPA concludes the SFO’s criminal investigation into the company.
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SFO director Graham McNulty said: ‘Public services and critical national infrastructure depend on business being carried out honestly and lawfully. Bribery undermines that trust and corrodes the systems on which society relies. Today’s outcome underlines the Serious Fraud Office’s determination to investigate and hold companies to account where those standards are breached.’
The agency’s investigation related to failure to prevent bribery in connection with three public sector contracts sought through the use of agents. These included a contract worth up to £200m awarded by the Omani Ministry of Transport and Communications.
Two further contracts were sought in Algeria, one for information technology and e-commerce solutions at Houari Boumediene Airport in Algiers, and a second for encryption technology for the Algerian Ministry of Post and Telecommunications. The Algerian contracts, which were ultimately not secured by the company, were expected to generate a profit of £1.4m.
The SFO’s last DPA was in July 2021 with consultancy, engineering and project management company Amec Foster Wheeler Energy Limited. The company was required to pay a penalty and costs totalling around £103m which formed part of a global settlement with authorities in the US and Brazil. Other DPAs include in January 2020 with aerospace company Airbus SE in which the company was required to pay €991m in penalty and costs, again, as part of a global resolution involving French and American authorities. The SFO called the DPA at the time 'record-breaking'.
In October 2020 the High Court approved a DPA between the SFO and Airline Services Limited which agreed to pay more than £2m under the terms of its DPA.
Dr Helen Taylor, deputy director of Spotlight on Corruption, said: ‘This DPA is a welcome deal to end a drought of corporate bribery successes for the SFO. Coming at a time of growing geopolitical instability and rising defence spending, this enforcement action sends an important signal to those in the defence industry tempted to cut corners to secure lucrative public contracts.
‘But with a financial penalty that represents just a fraction of the company’s profits, there is a serious risk that multinational defence giants will simply factor such penalties into the cost of doing business in a high-risk, high-reward sector.’
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