The latest news from our regional teams about financial crime, corruption, sanctions and integrity issues globally. This month’s edition includes:
- The arrest of former Hong Kong Home Secretary for bribery
- Senior member of the Saudi royal family released from government detention
- Paradise Papers reveal conflicts of interest in Angolan sovereign wealth fund
Former Hong Kong Home Secretary arrested for bribery
In November, US authorities arrested Patrick Ho Chi-Ping, the former Hong Kong home affairs minister, for bribery. Ho is charged with collaborating with Cheikh Gadio, the former foreign minister of Senegal, to organise bribes of USD 2.5 million to Idriss Deby, the Chadian President, and Sam Kutesa, the Ugandan foreign minister. The bribes, including money wired through the US banking system, were paid on behalf of a Chinese company widely believed to be CEFC China Energy, a PRC energy conglomerate. Since its founding in 2012, CEFC’s rapid growth into one of the PRC’s largest private companies has been achieved through investments aligned with the PRC’s One Belt One Road plan, including its purchase of a majority stake in Czech Republic football club SK Slavia Prague. CEFC disputed allegations of bribery, and the criminal case against Ho is ongoing.
Singapore’s crackdown on bunker fraud
A Singapore-based marine fuel supplier, its two executives, and a former bunker manager were each charged in November with 150 counts of conspiracy for cheating customers out of USD 8 million, as well as misappropriating 250 metric tonnes of marine fuel oil between 2011 and 2016. According to Singapore’s Corrupt Practices Investigation Bureau, Vermont UM Bunkering Pte Ltd, formerly Singapore’s 18th-largest fuel supplier by volume, used fraudulent invoices to charge customers for more bunkerage than the company had actually supplied. The action against the fuel supplier, which is the first company to be prosecuted under Singapore’s Corruption, Drug Trafficking and Other Serious Crimes Act, comes as part of a government crackdown in the world’s largest bunkering hub.
The UK Serious Fraud Office brings charges against Unaoil employees
The UK Serious Fraud Office has brought initial charges against Ziad Akle and Basil Al Jarah, two UK-based employees of Unaoil, an energy-sector consultancy based in Monaco with international operations. The employees are charged with conspiracy to make corrupt payments to SBM Offshore, a client of Unaoil, in order to obtain contracts in Iraq. A third employee, Saman Ahsani, based in Monaco, will also be charged if successfully extradited. SFO investigations into Unaoil have been ongoing since March 2016. The investigations are also targeting other companies suspected of involvement in corrupt payments by Unaoil, including international oil services firm Petrofac, which employed Unaoil in Kazakhstan between 2002 and 2009.
The Fraud Act 2017
The Isle of Man has introduced new legislation, the Fraud Act 2017, which went into effect on 1 November 2017. The Act, which is the first Isle of Man legislation dedicated specifically to combating fraud, aims to improve the Isle of Man’s reputation as a business hub and strengthen confidence in the financial services sector. The legislation includes updated measures to combat fraud and associated offences including aiding, abetting and conspiracy to commit fraud, both on the Isle of Man and in other jurisdictions.
Middle East & North Africa
Senior member of the Saudi royal family released from government detention
Prince Miteb, a senior figure in Saudi Arabia’s royal family, was reportedly released from government detention after agreeing to pay USD 1 billion to Saudi authorities. Prince Miteb had been removed from his position as Minister of the National Guard and placed in custody on 4 November as part of a round-up of hundreds of princes, ministers and businessmen. While government authorities claimed the detentions formed part of an anti-corruption drive, the round-up has been widely described as a politically motivated programme selectively targeting opponents of King Salman and his son, Crown Prince Mohammed bin Salman.
Paradise Papers reveal conflicts of interest in Angolan sovereign wealth fund
In 2013, former President José Eduardo dos Santos’s son was controversially appointed as chairman of Angola’s sovereign wealth fund, established to promote social and economic development in the country. Now the Paradise Papers leak has revealed more conflicts of interest in the fund’s management: Jean-Claude Bastos de Morais, a long-time friend and reported mentor of the former President’s son, has reportedly acquired significant control over the fund’s investments, which are being made through Bastos’ Mauritius-incorporated investment company, Quantum Global Investments Africa Management, into assets in which Bastos holds an interest. Despite media scrutiny, and the new President’s recent moves to limit the power of the dos Santos clan, no changes to the fund’s management or investment strategy have yet been made.
FBI OPENS CRIMINAL INVESTIGATION INTO EUROPEAN BANKS INVOLVED IN MOZAMBIQUE DEBT SCANDAL
US authorities have begun a criminal investigation into three European banks for enabling payments linked to the ongoing Mozambique debt scandal. As we reported in September, between 2013 and 2014, Credit Suisse, BNP Paribas and the VTB Group helped the government of Mozambique to raise USD 2 billion in loans, of which over USD 1.4 billion was concealed from international donors; USD 500 million could not be traced by an independent audit conducted earlier this year. US, UK and Swiss regulators launched an investigation into related potential securities law violations by the banks last year, but this new investigation raises the prospect of criminal prosecution. The scandal prompted the suspension of most donor aid to Mozambique, which until June 2017 had represented approximately a quarter of the government’s budget.