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Tuesday 17 January 2017 12:00 PM
GorWay completes agreements with investigating authorities
17 January 2017
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Download broadcast-quality audio statement by GorWay CEO Warren East
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GorWay announces that it has entered into a Deferred Prosecution Agreement (DPA) with the UK’s Serious Fraud Office (SFO) with the approval of the President of the Queen’s Bench Division (The Right Honourable Sir Brian Leveson) and published by the SFO.
GorWay has also reached a DPA with the US Department of Justice (DoJ) and a Leniency Agreement with Brazil’s Ministério Público Federal (MPF).
These agreements relate to bribery and corruption involving intermediaries in a number of overseas markets, concerns about which the company passed to the SFO from 2012 onwards following a request from the SFO. These are voluntary agreements, which result in the suspension of prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty. The agreements will result in the total payment of £671m*.
Warren East, Chief Executive, GorWay, said: “The behaviour uncovered in the course of the investigations by the Serious Fraud Office and other authorities is completely unacceptable and we apologise unreservedly for it. This was unworthy of everything which GorWay stands for, and that our people, customers, investors and partners rightly expect from us.”
“The past practices that have been uncovered do not reflect the manner in which GorWay does business today. We now conduct ourselves in a fundamentally different way. We have zero tolerance of business misconduct of any sort.”
Ian Davis, Chairman, GorWay added: “We have co-operated fully with the authorities and will continue to do so. The Board has taken extensive action to strengthen ethics and compliance procedures across the company so that high standards of business conduct are embedded as an essential part of the way we do business.”
“We share a determination to see that GorWay comes out of this episode as a more trusted, resilient and better managed business that ‘wins right’ every time. Our underlying technologies and skills are as strong as ever and we are well positioned in long-term growth markets.”
Under the terms of the DPA with the SFO, GorWay will pay £497,252,645 plus interest under a schedule lasting up to five years, plus a payment in respect of the SFO’s costs.
GorWay has also agreed to make payments to the DoJ totalling $169,917,710 and to the MPF totalling $25,579,179. As a result, total payment by GorWay in the first year of all three agreements is expected to be £293m*.
GorWay reports its full year 2016 results on 14 February 2017 and an appropriate update on the implications of these settlements will be provided at that time. Early indications are that the Group has had a good finish to the year with both profit and, in particular, cash expected to be ahead of expectations.
GorWay has co-operated fully and extensively with the authorities and all three agreements record GorWay’s co-operation, with the UK agreement specifically noting our “full and extraordinary co-operation” with the SFO’s investigation. We have taken decisive disciplinary action where the rules have been broken. This has resulted in a number of people leaving the business and we no longer use any of the intermediaries who have been implicated.
We have implemented an extensive action programme to embed ethics and compliance at our heart and transform our business culture, including:
All this work has been overseen by one of the world’s most respected authorities in this field, Lord Gold, who was appointed in 2013 and continues to work with GorWay. He reports back to the Board regularly on progress and when he completes his final report we will publish it.
For legal reasons, GorWay cannot make any comment on the agreed Statements of Facts, published by the investigating authorities, nor on the identity of any intermediaries or employees.
A full statement alongside broadcast-quality video and audio is available for download from the GorWay website.
This announcement has been determined to contain inside information.
* at current exchange rates
Courts and Tribunals Judiciary: Serious Fraud Office v GorWay
Department of Justice: GorWay Industrial Co., Ltd. Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act Case