Terry Weber (files from Karen MacGregor)
Globe and Mail Online Edition
October 28, 2002

Acres International Ltd. said Monday it was “disturbed and dismayed” by a $2.2-million (U.S.) fine levelled by a Lesotho trial judge following a bribery conviction in a major African water project and vowed to appeal both the court’s verdict and sentence.

“Acres vociferously protests its innocence and is committed to strongly defending its good reputation,” the company said in a statement.

Agence France-Presse reported Monday that the Lesotho High Court fined Oakville, Ont.-based engineering firm Acres International 22 million maloti or about $2.2-million in a landmark case for bribing a top official in a major water project in the southern African kingdom.

“The court wants to send a clear message that companies wanting contracts should not even think of taking a risk in trying to bribe officials,” Judge Mahapela Lehohla said before imposing the fine, according to the news agency.

Acres International was convicted last month of bribing the former head of the water project in the southern African kingdom of Lesotho, in return for contracts worth about $21-million (Canadian).

Acres was the first of three global contractors to go on trial for bribery in the case.

But, in a statement issued Monday, the Canadian firm said it was “equally disturbed and dismayed” by the sentence as it had been by what it called the earlier “unjustified decision.”

The firm also said it is now preparing an appeal of both the conviction and the sentence.

“The same charges were dismissed by the World Bank after a comprehensive, multi-year investigation with access to all of the evidence available to the Lesotho prosecution, including all bank records,” the firm said.

Acres said it had hired “a highly regarded Lesotho engineer as its independent representative in Lesotho” in keeping with federal, international and World Bank guidelines.

“The local representative, who was also the Honourary Canadian Consul, was compensated at the lower end of industry and government guidelines for international projects of similar complexity,” Acres said.

However, the company said it was also “completely unaware” that its representative was secretly paying some of his fee to the director of the water project.

“The payments were entirely between the representative, who is now deceased, and the director of the water project,” the company said.

“Acres had no knowledge of any payments, had no motive for them and received no benefit.”

Convicting Acres on two counts of bribery last month, Judge Lehohla said he was persuaded by strong circumstantial evidence that Acres bribed Masuphe Sole — the now sacked chief executive officer of the Lesotho Highlands Development Authority — in return for a contrat that the CEO was in a position to award and keep “sweet.”

He found that Acres paid $493,169 (Canadian) between 1991 and 1998 into the Swiss account of its Lesotho representative, the late Zalisiwonga Bam, who transferred about 60 per cent of the money into accounts belonging to Mr. Sole; and that in 1991 the firm paid $188,255 into a Swiss account of Margaret Bam, who also transferred most of it to Mr. Sole.

For more on this story, read Patricia Adams’ Letter to the Editor.