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Macmillan ordered to pay $17m for corruption in South Sudan

Finances & Budgets, Management Contracts

Macmillan Publishers has been banned from participating in World Bank tenders for a minimum of three years after being ordered to pay more than $17.7m (£11m) for paying officials to win an education deal in South Sudan.

The order by the high court followed a two-year investigation by the Serious Fraud Office over payments made by part of its education business, Macmillan Education. The World Bank first reported the attempted bribery of officials overseeing a tender for educational materials in South Sudan – a contract Macmillan did not win. The report led to raids by the City of London police and, in March 2010, the company itself took the case to the SFO.

In addition to the three-year ban on taking part in World Bank tenders, Macmillan has decided to cease all live and prospective public tenders in its education division business in east and west Africa, regardless of the source of funds.

“I am pleased with this outcome,” said Richard Alderman, the SFO director. “Civil recovery allows us to deal with certain cases of corporate wrong-doing effectively. It delivers value for money to the public by saving the cost of lengthy investigations and protracted legal proceedings and removes any property obtained as a result of the wrongdoing. At the same time it forces the company to reform its practices for the future.”

Macmillan last year signed a settlement agreement with the World Bank over allegations connected to its Southern Sudanese contract.

The company further co-operated with the World Bank and the SFO by instructing external lawyers to conduct an independent investigation into publicly tendered contracts won by Macmillan in Rwanda, Uganda and Zambia between 2002 and 2009.

“The materials were supplied by publishers, often following the issuing of a public tender by the national government of a country,” said the SFO on Friday. “Such public tender processes were susceptible to improper relationships being formed and corruption taking place. It was impossible to be sure that the awards of tenders to the company in the three jurisdictions were not accompanied by a corrupt relationship.”

In a statement, Annette Thomas, chief executive of Macmillan, said: “Macmillan is a business with strong values rooted in education and development, which we hold dear. We will not tolerate any form of potentially unlawful behaviour, as our approach to the SFO has demonstrated.”

Millions of dollars of international aid have been pumped into South Sudan through a multidonor trust fund managed by the World Bank, established in 2006 to fund post-conflict reconstruction after two decades of civil war in the region.

The company admitted that a representative of Macmillan Education made “improper and unauthorised payments” to local officials in its unsuccessful bid to win a multimillion-pound contract to print English language teaching and school curriculum materials. The tender was part of a $45.9m project to develop the school curriculum, train thousands of teachers, build 100 schools and refurbish a further 50.

The Guardian, July 25, 2011


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