Madhavi Acharya-Tom Yew
Toronto Star
October 29, 2002

Acres International Ltd. has been fined about $3.5 million after being convicted of bribery in the tiny south African country of Lesotho.

The fine was handed down yesterday, but the Oakville engineering firm continues to deny any wrong-doing in the corruption scandal, which involves construction contracts for a massive water project.

Acres said it is “equally disturbed and dismayed” by the judge’s sentence as it was by the “unjustified” guilty verdict delivered last month.

The company is in the process of appealing the decision, spokesperson George Soteroff said. “It took a long while to get all the full transcripts and the decision of the trial, so it’s been a slower process than hoped.”

It is not clear whether Acres will be forced to pay the fine immediately. The court reserved its decision on a defence request to suspend payment of the fine pending appeal.

“It would be very unusual to require payment in advance of the appeal,” Soteroff added.

Other observers welcomed the sentence as a strong signal to the business community.

“I think the judge is sending a clear message to other companies that bribery doesn’t pay,” said Patricia Adams, executive director of Probe International, a Toronto-based organization that monitors Canada’s aid and trade. “With tough penalties like this, companies will get the message that it’s not worth it.”

Acres’ staff and officers did not face jail terms. But the 78-year-old company could face exclusion from international development contracts.

The World Bank, which earlier investigated and cleared Acres of wrong-doing, now says it will review the evidence from the Lesotho proceedings.

Acres was accused of directing $320,000 (U.S.) to Masupha Ephraim Sole, a Canadian-trained engineer who oversaw the $6 billion Lesotho Highlands Water Project during the 1980s and ’90s. The money was said to be channelled through Zalisiwonga Bam, a local engineer hired by Acres.

The High Court ruled that a “representative agreement” between Acres and Bam was a ploy to hide bribes.

“Acres vociferously protests its innocence and is committed to strongly defending its good reputation,” the company said in a release yesterday, noting that it was cleared in probes by the World Bank and the Canadian International Development Agency.

“Acres was completely unaware that the representative was secretly paying some of his fee to the director of the water project. Acres has no knowledge of any payments, had no motive for them and received no benefit,” the company said.

The crown argued for a fine of 25 million maloti ($3.8 million Canadian), but the company suggested 2 million maloti or $305,000 (Canadian) was more appropriate.

Acres was among 12 international companies accused of paying bribes in a giant water control project, but the first to go on trial.

Sole was convicted in June on 13 counts of corruption and sentenced to 18 years in jail after being found guilty of receiving more than $1.6 million in bribes from consultants and contractors from Canada, the United States, Britain, Germany and France. He has also launched an appeal.

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