Bertling case underwhelms as a template for tackling corporate wrongdoing

F.H. Bertling’s million-dollar fine for bribery offenses in Angola marks the close of a chapter for the logistics company. But doubts about whether the money can be recouped from the insolvent company, and the dropping of a parallel case, raise questions about how successful prosecutors have been.

The company — the UK arm of Germany's Bertling Group until it was sold two years ago and put into liquidation — was fined 850,000 pounds ($1.1 million) in a London court on Monday for bribery offenses linked to $20 million worth of freight-forwarding contracts in Angola.

The penalty marks an end to all Serious Fraud Office prosecutions of the company and former executives, which have cumulatively led to nine convictions and four acquittals across the Angola case and a separate North Sea case.

The company has been awaiting prosecution over allegations of corrupt payments between 2010 and 2013 to win a freight contract, known as Project Jasmine, for a gasfield in the North Sea run by ConocoPhillips. But following the Angola fine, the SFO told MLex it wouldn’t take further action against the company over Project Jasmine.

The SFO declined to comment on why it had decided not to proceed with prosecuting the company, but the fact the company is insolvent would have factored into the SFO's thinking.

Several former executives were convicted in a trial over the Jasmine charges last November, but the company was kept separate from that. Its insolvency was a factor in that decision, it is understood.

F.H. Bertling's liquidation calls into question whether the UK government, the ultimate recipient of revenue from SFO fines, will be able to recover a meaningful amount of money. The SFO and company representatives declined to comment on this point.

But it's understood that the government is likely to be at the back of the queue when it comes to securing money from the liquidators, and could end up with only around 10 per cent of the penalty.

For those looking to see tough action taken against corporate wrongdoing, this leaves an unsatisfactory situation where a subsidiary company has been found guilty in one bribery case and implicated in another, but its parent may end up walking away largely unscathed, aside from reputational damage.

The Bertling Group, a large family-owned company with 54 offices around the world, wasn’t party to the proceedings in Southwark Crown Court this week.

F.H. Bertling was sold to an Iraqi company in March 2017, ahead of the Angola trial starting in September that year. It was then put into liquidation. F.H. Bertling Logistics Aberdeen now carries out the company’s work in the UK. It appears to have largely picked up where its predecessor left off.

In passing sentence this week, judge Chris Hehir said: “This was a very serious piece of corruption indeed. It was planned and systematic. The corruption of a public official brings huge risks of environmental and social harm as well as damaging and corrupting the commercial environment."

That message is unequivocal. But without meaningful action taken against the company, the strong message risks being undermined.