U.K. SFO Poised for First Plea Deal With ICBC Standard Bank

  • SFO says Judge Leveson has approved deal in principle
  • Agency will seek final agreement Monday in London court

The U.K. Serious Fraud Office is seeking to enter into a plea agreement with ICBC Standard Bank Plc, marking the first deferred prosecution agreement the agency has issued since receiving new powers last year.

The deal, which was approved in principle in a private hearing with Judge Brian Leveson, will go before a London court Monday for final approval, the SFO said in a statement Thursday. The U.K. prosecutor hasn’t disclosed what the bank has done wrong to warrant the agreement, while ICBC said it expects to settle for less than $40 million.

The U.K. introduced DPAs in February 2014. The SFO said it is planning to secure its first two agreements by the end of the year. Under such a deal, prosecution is suspended if the company agrees to conditions that can include paying a fine, repaying profits, and helping bring cases against individuals.

Standard Bank said in a statement it won’t pay more than $40 million as part of the agreement and the facts to which the DPA relate took place before ICBC acquired a 60 percent majority shareholding in South Africa’s Standard Bank in February.

"This is a very welcome development," said Stephen Parkinson, a London-based lawyer at Kingsley Napley. “DPAs, if used properly, can avoid unnecessary fallout for shareholders and other third parties affected by a company prosecution. DPAs don’t allow companies to get off scot-free, any interaction with prosecutors is going to impact reputation, but it can allow for a sensible conclusion in smaller cases."

DPAs are a common tool used by prosecutors to resolve investigations in the U.S., but the bar to secure the accords in the U.K. is much higher, Parkinson said. While U.S. court approval is seen as a formality for DPAs, judicial involvement in the U.K. is much more of a hurdle for prosecutors, he said.

The SFO hadn’t announced any investigation into ICBC Standard Bank before Thursday.

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