City corruption: Company of Tory donor Ayman Asfari paid tens of millions in bribes across Middle East
A company whose biggest shareholder is a major Tory donor did not stop its employees from paying out more than £32m in bribes in order to secure a range of contracts across the Middle East.
Petrofac, one of the world’s largest service providers to oil and gas producers, won business worth £2.7bn in Iraq, Saudi Arabia and the United Arab Emirates after handing over tens of millions of pounds in bribes.
Contracts secured through bribery included a £253m deal with Gazprom in Iraq after Lufkin was told in an email by an agent: “You won’t be successful without my help,” Kinnear said.
In one case, false invoices for non-existent Toyota Land Cruiser 4×4 vehicles were produced to pay the bribes.
Tory ties
Petrofac was formerly run by Ayman Asfari, a Conservative donor who with his wife has given about £800,000 to the party.
Asfari (pictured above) and his family hold a 19 per cent stake in the company, making the Asfari’s the largest shareholder.
In May 2017, Asfari and his wife donated £100,000 to the Conservative Party election campaign, days before Asfari was scheduled to be interviewed by the Serious Fraud Office.
Former prime minister David Cameron promoted the company during a two-day stay in Bahrain in 2017, flying back from the country on a plane owned by Asfari.
While serving as prime minister, Theresa May wrote to her Bahraini counterpart to support Petrofac’s bid for a contract in the country.
Career
Asfari was born in Syria, the son of a diplomat, but raised outside the country. His first job was in Oman, as a consulting engineer carrying out soil testing.
He attended the Wharton School of the University of Pennsylvania for his MBA. the same university where former US President Donald Trump studied.
Asfari joined Petrofac in 1991 when it had just one plant in Tyler, Texas. He bought out the company in 2001, and took it public on the London Stock Exchange in 2005.
Asfari won the UK category of the Ernst & Young Entrepreneur of the Year Awards in 2011. Four years later, Forbes calculated Asfari’s net worth at $1.2bn.
Pleas
Clare Montgomery QC, representing Petrofac, entered pleas yesterday to seven counts of failing to prevent bribery between October 2011 and May 2017 at Southwark Crown Court.
Jonathan Kinnear QC, for the Serious Fraud Office (SFO), said: “The total contracts reflected in the seven counts were worth approximately $3.6bn and bribes of approximately $44m dollars were paid by Petrofac to secure those contracts.”
Earlier, former Petrofac executive David Lufkin, 53, pleaded guilty to 14 counts of bribery relating to payments of about £60m for contracts worth around £6.2bn.
Kinnear said statements given by Lufkin to the SFO set out “in considerable detail the corruption he was involved in while employed by Petrofac” and the role of other employees at the firm over a six-year period.”
“Former global head of sales Lufkin was responsible for negotiating and paying bribes to corrupt agents in a “complex process to ensure the right payments were made to the right people at the right time”, he added.
Sentencing
Petrofac and Lufkin, from Tadworth, in Surrey, will be sentenced by Judge Deborah Taylor on Monday following the four-year probe by the SFO, which said it had reached an agreement with the company.
The court heard the parent company obtained a maximum of £18m from its subsidiaries as a result of, or in connection with, the offending and saved £4.5m by not having an effective compliance system.
The prosecution and defence have agreed a confiscation order should be made of £22,837,985 within three months.
Kinnear suggested the judge could fine the firm £97m but said Petrofac cannot pay an immediate penalty because it would breach an agreement with the Treasury to repay money leant to the company during the Covid-19 crisis.
Montgomery said Petrofac will have to re-finance but could raise between £66m and £81m, meaning it could pay a fine of £44m after costs and confiscation of around £30m.
She said the firm’s three most senior executives in court did not bear “personal responsibility” but accept “personal responsibility for making right what went wrong”.
She said the case had harmed Petrofac’s customers, the countries where it has done business and “the reputation of the UK”.
“There has been a profound change in the company and a change that is ongoing,” the barrister said.
The SFO has accepted this is in essence a different company from the one that committed the offences.
Tom Allen QC, representing Lufkin, said his client should be spared an immediate prison sentence.
He had shown “a real backbone when it came to facing up to the reality of the situation” and through his cooperation had “singlehandedly” provided the SFO with the material to bring the prosecution against Petrofac, said the lawyer.
The firm said in a statement last week all employees involved in the corrupt payments have left the business.
Chairman Rene Medori said: “This was a deeply regrettable period of Petrofac’s history. We are committed to ensuring it will never happen again.
“We have fundamentally overhauled our compliance regime, as well as the people, and the culture that supports it. Our comprehensive programme of corporate renewal has been acknowledged by the SFO.”
Shares in Petrofac rose about 24 per cent following the news yesterday late afternoon, boosting the value of the 19 per cent of shares owned by Asfari and his family by more than £16m.