This week, the U.K.’s Serious Fraud Office (“SFO”), officially announced that it has been conducting a criminal investigation into Monaco-based Unaoil SAM, an oil industry consultancy firm. The investigation was launched in March of this year, spurring police raids of the offices and homes of the company’s officials. The investigation began on the heels of media reports by The Huffington Post and its Australian partner Fairfax Media which alleged that the company engaged in international bribery schemes to secure contracts in high-risk countries for its multinational clients. The SFO, however, does not cite specifically to these media outlets as their source, but instead contends that the agency has been approached by a number of sources.
Unaoil vehemently denies the allegations made by Huffington Post and Fairfax Media reporters. Furthermore, as part of a litigation in the U.K. High Courts between Unaoil and Leighton Offshore, founder and chairman of Unaoil, Ata Ahsani, rejected, under oath, claims that Unaoil paid millions in kickbacks to win contracts, swearing that Unaoil was not involved in any bribery. The company has also sent internal communications to its employees and made remarks on its website denying the allegations. Many of Unaoil’s clients also publicly denied claims that they were involved in bribes to secure international contracts.
However, according to media reports, Unaoil implemented a systematic scheme in which it would secure an advance on a percentage stake of profits generated by a proposed deal, keeping a portion for itself while using sums as high as $20 million to bribe officials in a position to secure contracts. Unaoil allegedly implemented this scheme on behalf of hundreds of its multinational clients (including Rolls Royce, Halliburton, Samsung, and Hyundai among others), which sought contracts in highly corrupt countries throughout the Middle East, Africa, and Central Asia. While many of the clients claim that they did not know Unaoil was bribing officials on their behalf, thousands of leaked documents tell a different story. Though some of the clients may have been ignorant of the bribes, Huffington Post and Fairfax Media reporters contend that the documents show that others were either willfully blind or fully aware of the corruption. Many of the documents leaked to the media outlets, which date from 2003 to 2012, reflect email communications between Unaoil and its clients which either plainly discuss potential bribes or do so under the guise of code words and pseudonyms.
In total, the alleged bribes are estimated to be in the billions, but even more alarming is the extent to which players throughout the oil industry are reportedly involved, as Unaoil’s client list reads as a who’s who in the industry. Furthermore, media reports allege that international banks, including those based in the US and London, could potentially be complicit in the scheme, laundering money on behalf of Unaoil.
If authorities are able to corroborate the above described media reports, investigations could reveal a scheme which could prove to be bigger than any corporate kickback case previously exposed.This would not only become a blockbuster case in terms of scope, but would be an important victory in boosting the SFO’s credibility, which some speculate could be shut down and replaced by the newly created International Corruption Unit (ICU). Despite making various public comments regarding intentions to increase anticorruption and money laundering enforcements, the SFO has had very few successful outcomes until very recently (the SFO secured its first deferred prosecution agreement in December 2015 and its first successful conviction of a company in November 2015). Thus, garnering further enforcement victories may be vital to the continuing existence of the agency itself.
Importantly, the SFO could obtain a number of positive results as it is not limited to taking actions against only Unaoil, rather the companies that hired Unaoil could also become embroiled in the investigation and face criminal sanctions. For example, Rolls Royce is also being investigated by U.K. authorities, which, like the other clients of Unaoil will not be protected even by ignorance of the bribes, as under U.K. laws, companies have a duty to investigate their business partners.
Authorities in the United States as well as Australia are also investigating the claims as they relate to Unaoil.