On 30 July 2020, the Serious Fraud Office (“SFO”) announced charges against Riyadh-based subsidiary of Airbus SE (“Airbus”), GPT Special Project Management Limited (“GPT”), as well as three individuals, in connection with an investigation into allegations regarding the conduct of GPT’s business in Saudi Arabia.
GPT is a UK company acquired by Airbus in 2007 from Ericsson of Sweden on the recommendation of the Ministry of Defense (“MoD”). It operated in Saudi Arabia until April 2020.
In August 2012, the SFO commenced an investigation following allegations from a former employee that GPT paid bribes relating to a UK government contract worth £2bn to provide communication services to the Saudi Arabian National Guard. Amongst these were allegations that GPT executives had bribed Saudi National Guard officials with luxury cars and secret payments to Cayman Island-based bank accounts.
The SFO’s investigation related to contractual arrangements originating prior to GPT’s acquisition in 2007 and continuing thereafter. In particular, in relation to contracts awarded to GPT in respect of work carried out for the Saudi Arabian National Guard, which were the result of a deal between the UK and Saudi Arabia governments, for which the MoD was the sole customer.
A Deferred Prosecution Agreement (“DPA”) was agreed between Airbus and the SFO in January 2020, with an agreement to pay up to £3bn, following an investigation by authorities in the UK, US and France. The new allegations involving GPT were not part of the January 2020 DPA.
At the time of the signing of the DPA in January 2020, the probe into GPT was still subject to approval from the Attorney-General (then Geoffrey Cox) to prosecute – the SFO must first obtain the approval of the Attorney-General to prosecute diplomatically sensitive matters.
A number of anti-corruption organisations, including Transparency International and Spotlight on Corruption, have expressed serious concerns over the progress of the 18 month-long case.
The SFO announcement follows an eight year-long investigation and sees charges brought against GPT and three individuals into allegations concerning the conduct of GPT’s business in Saudi Arabia.
In what is being seen as one of the SFO’s most politically sensitive cases, Jeremy Cook, the former GPT Managing Director, and John Mason, the financial officer and part-owner of Simec and Duranton (two GPT subcontractors based in the Cayman Islands and Switzerland) were both charged with corruption in respect of acts taking place between January 2007 and December 2012 in relation to contracts for Saudi Arabia’s National Guard.
Mr. Cook has also been charged with misconduct in public office between September 2004 and November 2008, in respect of commissions he received for contracts he placed with a firm, ME Consultants Ltd, whilst he was employed by the MoD. In connection with this offence, a third individual, Terence Dorothy, has also been charged with aiding and abetting.
The case will be heard before Westminster Magistrates’ Court on 14 September 2020.
The political and economic impact of the outcome of this case and its effect on UK-Saudi relations remains to be seen.
The charges brought by the SFO following an 8 year-long investigation have led to criticism over the delay taken for consent to charge to be given by the Attorney-General. The SFO’s GPT file appears to have awaited consent to charge for over three years and by three different Attorney-Generals, until a decision was finally taken.
In a new development in the case, on 7 August 2020 a group of Airbus shareholders filed a fraud lawsuit in the federal court in Newark, New Jersey, seeking damages for securities fraud in respect of allegations that they had been misled over the company’s ability to avoid and manage corruption accusations.