Canadian oil and gas company Niko Resources pleaded guilty to one charge of bribing a foreign official, in violation of the Canadian Corruption of Foreign Public Officials Act (CFPOA), in the Alberta Court of Queen's Bench on Friday 24th June.
Niko admitted to bribing a Bangladeshi government minister in 2005 after a blowout at one of its natural gas fields.
Niko provided a luxury SUV worth CDN$190,000 to Bangladesh's Minister for Energy and Minister Resources AKM Mosharraf Hossain and paid for non-business expenses him to visit Calgary, with side trips to visit family in New York and Chicago.
Hossain resigned from his post on 18th June 2005 as corruption allegations hits the Bangladeshi media.
In 2005, Canadia' then-ambassador to Bangladesh David Sproule met with the president of Niko's Bangladeshi subsidiary Qasim Sharif to discuss the allegations. According to court documents, Shirf told Spoule “these things are done all the time” and “they give these things in these situations”.
Niko agreed to pay CDN$8,260,000 plus a victim surcharge of 15 per cent, bring Niko's total fine to CDN$9,499,000.
Niko will also have to submit to a three-year probation period during which the court will supervise Niko's compliance with the CFPOA through audits and reports conducted by an independent third party, at Niko's expense.
The Niko conviction is significant because it is only the second conviction under the CFPOA and the first since the Royal Canadian Mounted Police (RCMP) established a dedicated International Anti-Corruption Unit in late 2007.
Canada has been criticised by Transparency International in recent years for failing to pursue corruption convictions, but analysts see the Niko case as a positive step forward as it involves corruption in a foreign country undertaken by a foreign subsidiary of a Canadian company.
The RCMP announced in January 2011 that it had 23 active investigations under way and according to Bennett Jones, that number has now risen to over 30.
One such investigation is into Liberal Senator Mac Harb, who is being looked at in a RCMP breach-of-trust investigation into whether he used his position in public office to influence the Banglasdeshi government.
Harb was paid CDN$65,000 to work as a consultant for Niko. It is alleged that he travelled to Bangladesh four times using a special passport reserved for MPs, senators and retired ambassadors while on Niko business.
Canadian senators are allowed to accept outside employment, but the investigation is into whether he traded on his position as a senator to help the interests of a private company. Harb has so far not been charged with a crime.
Niko operates mostly in India and Bangladesh, but also has interests in Pakistan, Kurdistan, Indonesia, Trididad and Tobago and Madagascar.
Niko's shares were down nearly 4 per cent in afternoon trading on the Toronto Stock Exchange on Friday.
Sources: Bennett Jones, CBC, Globe & Mail, Montreal Gazette
For more information, please see the Menas ACCS website, here.
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