£5.6m taken from Scots drilling company under proceeds of crime law

• Company found to have benefited from corrupt payments made 2007

• Abbot Group conducted internal investigation that precluded legal action

The Aberdeen-based company, whose activities are centred around its operating subsidiary KCA Deutag, is the first company in Scotland to enter into a civil settlement with the Crown Office under new corruption and bribery legislation.

The Abbot Group reported details of the corrupt payments, made in connection with an overseas deal, to the Crown Office authorities after launching an internal investigation last year.

A Crown Office spokesman said the Civil Recovery Unit would now be recovering £5.6 million under Proceeds of Crime legislation after the Abbot Group accepted that it had benefited from unlawful conduct.

He said: “The Abbot Group, which is based in Aberdeen, admitted that it had benefited from corrupt payments made in connection with a contract entered into by one of its overseas subsidiaries and an overseas oil and gas company.

“The contract was entered into in 2006 and the payments were made in 2007. The sum to be paid by Abbot represents the profit made by the company under the contract. Since then, the ownership and structure of Abbot has changed significantly.”

The spokesman explained: “The corrupt payments were brought to light in May 2011 following enquiries by an overseas tax authority which resulted in an investigation by a firm of solicitors and a firm of accountants instructed by Abbot itself. Abbot reported the results of the investigation to the Crown Office and Procurator Fiscal Service in July 2012 under the self-reporting initiative.

“In view of any criminal investigation of others that may follow, it is not possible to provide any further details of the corrupt payments.”

Lesley Thomson QC, the Solicitor General, said: “Bribery and corruption cause worldwide damage to business and economic development. The self-reporting initiative creates a mechanism for businesses to recognise their corporate responsibility and take a rigorous approach to the investigation and elimination of such practices. While consideration must first be given to prosecution of appropriate cases, I am pleased that the Crown Office and Procurator Fiscal Service and the Civil Recovery Unit are committed to taking effective steps to ensure that businesses face up to their responsibilities and relinquish any unlawfully obtained profits.”

Ruaraidh Macniven, Head of the Civil Recovery Unit explained: “Abbot is the first company to have met the strict criteria of the self-reporting initiative since it was introduced in 2011. That initiative enables responsible businesses to draw a line under previous conduct and, providing the criteria are met, affords the possibility of a civil settlement. Self-reporting is an important way to ensure that corruption is exposed and that companies put in place effective systems to prevent it. The funds which have been recovered will be remitted to the Scottish Consolidated Fund.”

Justice Secretary Kenny MacAskill said: “This significant recovery made through the excellent work of the Civil Recovery Unit will be invested in the Scottish Government’s hugely successful CashBack for Communities Programme which takes cash from the Proceeds of Crime and invests it in a range of sporting, cultural, community mentoring projects and sports facilities for the benefit of our young people and their communities.

“The £5.6m will be used to further expand the £46m CashBack Programme by funding projects that will contribute towards delivering youth employability, healthy lifestyles and reducing re-offending for the young people of Scotland.”

Louise Andrew, general counsel at Abbot Group, said: “Abbot Group has self-reported to the Scottish Crown Office and Procurator Fiscal Service that it uncovered that, in 2007, improper payments were paid in connection with an overseas transaction.

“The payments were made to an overseas company. The self report has led to today’s civil settlement agreement with the Civil Recovery Unit in the sum of £5.6m which represents the profit on the contract.

“None of the personnel who were involved in those payments remain with the group. The settlement also means there will be no criminal investigation of Abbot or subsidiaries. Unfortunately, in view of any criminal investigation of others that may follow, it is not possible to provide any further details.

“We are deeply disappointed this improper payment took place. We believe in conducting business legally and ethically and do not tolerate bribery in any form.

“The Crown Office applies very strict criteria in determining whether a case is suitable for a civil settlement. Civil settlement is only offered if Crown Office is satisfied that the company operates transparently, has sound anti bribery systems in place and is fully committed to compliance.

“KCA Deutag (the trading name of Abbot Group Limited) is committed to anti-bribery compliance and creating a corporate culture in which bribery has no place. The board of directors believe that self-reporting was the right thing to do and demonstrates an absolute commitment to acting legally, ethically and transparently.”