On 14 August, the Serious Fraud Office (SFO) announced that four men connected to Sustainable AgroEnergy plc have been charged with offences of conspiracy to commit fraud by false representation and conspiracy to furnish false information, contrary to section 1 of the Criminal Law Act 1977, in connection with the promotion and selling of "bio fuel" investment products to UK investors. The value of the alleged fraud is asserted to be approximately £23m and the offences are said to have taken place between April 2011 and February 2012. As a secondary point, SFO added that three of the four men have also been charged with offences of making and accepting a financial advantage contrary to section 1 (1) and 2 (1) of the Bribery Act 2010.
Although the SFO is supposed to be the so-called lead prosecutor of Bribery Act offenses, many have questioned the time it has taken for the SFO to announce so much as a Bribery Act investigation. Only last month David Green, the SFO’s director, responded that two live investigations were underway of companies suspected to have breached the Act. Now, almost as an afterthought, actual prosecutions have been commenced with the defendants scheduled to appear in Westminster Magistrates Court on 23 September 2013. The defendants are all UK nationals, not subject to bail or remand, and they have not yet had an opportunity to enter any plea.
These charges arise from the collapse last year of the firms which invested in bio fuel companies in Southeast Asia. Freezing orders were issued in February 2012 on assets held by Sustainable Agroenergy Plc, Sustainable Wealth Investments (UK) Limited and Sustainable Growth Group (UK) Limited after a request from the SFO. The four men now charged were directors and officers of the failed firms. It had been thought at the time of collapse that many UK pension investors stood to lose as much as £60m. The differing amounts and exactly how the bribery charges are related to the fraud charges should come out as the prosecution unfolds. Whether there are yet two other bribery investigations underway at SFO or this halves the case load also remains to be seen.
When it comes to reading the tea leaves as to where, when and whether the SFO will live up to the promise to more aggressively investigate and prosecute companies as opposed to individuals, the “jury is still out.”