UK firms named in Lesotho bribery verdict

Chris McGreal in Johannesburg
Guardian (U.K.)
May 21, 2002

A court in Lesotho has found a senior government official guilty of accepting millions of pounds in bribes from British and other foreign construction firms.

The conviction of Masupha Sole, the former chief executive of the tiny kingdom’s biggest construction project, a series of huge dams, also amounts to a damning indictment of the business practices of a number of big construction companies which could cost some of them lucrative international contracts.

He was convicted on 11 counts of bribery and two of fraud for accepting about £3m in bribes over more than a decade from an array of European, Canadian and South African firms in return for contracts worth hundreds of millions of pounds.

The British firms involved, either individually or as members of consortiums, are Balfour Beatty, Sir Alexander Gibb and Company, Stirling International civil engineering and Kier International.

The judge, Brendon Cullinan, said he was satisfied that Sole, who was responsible for awarding government contracts to build the dams, accepted payments from foreign contractors through intermediaries in return for “furthering their private interests”.

Lesotho’s attorney general, Fine Maema, has already charged the companies or the consortiums with corruption. One trial, of the Canadian company Acres International, is under way and two others are pending.

Yesterday’s verdict could result in some of the companies involved being barred from competing for projects funded by the World Bank and European Union, which maintain a blacklist of firms found to have paid bribes to government officials.

When Sole’s trial began last June, the prosecution said that as the chief executive of the Lesotho Highlands Development Authority he was at the centre of a web of corruption. Bribery became a standard business practice as he handed out contracts to build dams to supply water and electricity to neighbouring South Africa.

The project was always controversial, in part because it was begun during the apartheid regime and because thousands of people were displaced by it. But the government argued that the dams would provide a steady source of much-needed revenue.

The prosecution said that Sole maintained at least three Swiss bank accounts into which bribes were paid in sterling, French francs, German marks and dollars. Payments by particular consortiums coincided with the awarding of contracts to those companies. According to the charges on which Sole was convicted, the biggest payments were made by the Lesotho Highlands Project Consortium, which was headed by the French company Spie Batignolles and included Balfour Beatty as a partner. The prosecution said that it deposited more than £1m in Sole’s accounts over three years. Sole was also convicted of accepting about £250,000 from another consortium, Highlands Water Venture, which has two British partners – Kier International and Stirling International. Another convictionrelated to the payment of £51,478 by the British firm Sir Alexander Gibb.

The prosecutor, Guido Penzhorn, said that yesterday’s judgment amounted to a damning verdict not only against Sole but the companies involved.

“For Mr Sole to have accepted bribes, someone had to pay them. The court found that Highlands Water and all these other companies paid the bribes,” he said.

The Lesotho government has been widely praised for pursuing the case because it has been virtually unheard of in Africa for big foreign companies to be prosecuted for corruption.

The judge is expected to deliver a 200-page explanation of his verdict before sentencing Sole on Thursday.

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