Corporate bribery verdict in Lesotho

May 20, 2002

A former senior official in Lesotho has been found guilty of taking bribes from a consortium of international firms in relation to a highly controversial water development project.

Masupha Sole, ex-chief executive of the Lesotho Highlands Development Authority, was pushed into the Lesotho High Court in a hospital bed to hear the verdict.

Mr Sole was convicted on 13 counts of bribery linked to the Lesotho Highlands Water Project, which supplies water to South Africa, but which has run into opposition because of the disruption to local people and wildlife.

The international consortium, led by French Spie Batignolles, and including the UK’s Balfour Beatty as well as three other European construction firms, could now be pursued by the Lesotho Government. The case could have an effect on the way multinationals run their operations in developing countries, where ethical standards have traditionally been downplayed.

Money man

Judge Brendon Cullinan found Mr Sole knew the sources and purpose of the payments made through intermediaries to his accounts in Lesotho, Switzerland and South Africa.

The judge said he was satisfied, “beyond responsible doubt” that Mr Sole had received payments from the international contractors and had agreed to “further their private interests.” The judgement is the culmination of a months-long legal wrangle, begun in the middle of last year.

In parallel, although moving more slowly, is a case against the companies themselves, which is being contested fiercely by the firms.

International construction companies are keen to avoid any fall-out from the case, since it could result in their exclusion from further World Bank-funded projects.

Further to go The Lesotho Government, meanwhile, is reportedly keen to keep pursuing the case, in a bid to make the point that bribery, although widespread, will not be tolerated.

The accused consortium is involved in building a group of huge dams in Lesotho, a scheme agreed in 1986 between Lesotho and the then-apartheid government of South Africa, which needed reliable sources of both water and electricity.

The World Bank arranged much of the finance, and is currently holding an internal investigation into the project. Over the past two years, 54 companies have been blacklisted from bidding on Bank-funded operations.

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