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Sovereign Note Mandate, Tanzania: US $6 Million 'Partner Fee', Services Not Included

One 1% introducer fee, paid via the sister bank. The charge: failing to prevent bribery.

Sold2012–2013National
$6M≈ €5.36MAs stated in the source: US $6 million

Already sold, to Standard Bank Plc (now ICBC Standard Bank plc), in 2012–2013. Nothing on Lobay is for sale.

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Seller

Role
two of the three directors and shareholders of a local 'partner' company: a Commissioner of the Tanzania Revenue Authority (a member of the Government of Tanzania) and a former chief executive of the Capital Markets and Securities Authority
Institution
Tanzania Revenue Authority; Capital Markets and Securities Authority
Place
Tanzania
Country
Tanzania

Item specifics

ConditionDeferred prosecution agreement, 30 Nov 2015 (not a conviction)
LocationTanzania
SellerTwo directors of a local partner firm: a tax authority Commissioner and a former regulator chief. Names withheld.
Winning bidderStandard Bank Plc (now ICBC Standard Bank plc)
CategoryFinance
Sold2012–2013
Payment methodFee via Stanbic Bank Tanzania; most withdrawn in cash soon after
ReturnsNo returns. US $16.8 million penalty, US $8.4 million disgorged, US $6 million compensation (2015)

Description

What the bribe bought

According to the deferred prosecution agreement with the Serious Fraud Office, the deal earned Standard Bank Plc US $8,400,000 in profit.

Return on bribe: Every $1 of bribes earned about $1.4.

What happened

Standard Bank Plc (now ICBC Standard Bank plc) won the mandate to raise US $600 million for the Government of Tanzania through a sovereign note private placement. A local partner company received a 1% fee of US $6 million, paid via Stanbic Bank Tanzania. Most of it was withdrawn in cash shortly afterwards. Two of the partner's three directors were a Commissioner of the Tanzania Revenue Authority and a former chief executive of the Capital Markets and Securities Authority. The court found no evidence the partner provided any services. The bank was dealt with for failure to prevent bribery, and the case ended in a DPA approved on 30 November 2015.

Read the article

Standard Bank to pay $32.6m over Tanzania bribery scandal · The Guardian

Official record

SFO v Standard Bank plc: Approved Judgment (Sir Brian Leveson P), 30 November 2015 · Courts and Tribunals Judiciary

Shipping & returns

AuthorityKindAmountYear
Crown Court at Southwark (SFO DPA)compensation to the Government of Tanzania, plus interest of US $1,046,196.58$6M≈ €5.36MAs stated in the source: compensation of US $6 million plus interest in US $1,046,196.582015
Crown Court at Southwark (SFO DPA)financial penalty$16.8M≈ €15MAs stated in the source: a financial penalty of US $16.8 million2015
Crown Court at Southwark (SFO DPA)disgorgement of profit$8.4M≈ €7.51MAs stated in the source: disgorgement of profit on the transaction of US $8.4 million2015
U.S. Securities and Exchange Commissioncivil money penalty$4.2M≈ €3.75MAs stated in the source: civil money penalty of US $4.2 million2015