Balfour Beatty reaches agreement with SFO

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by Lin Freestone

Balfour Beatty has reached an agreement with the Serious Fraud Office (SFO) this week relating to certain payments in respect of the execution of its joint venture contract to build the Bibliotheca Alexandrina in Egypt. Balfour Beatty is paying £2.25m to settle the investigation into its work.

The project was delivered to the highest international construction standards and to the customer’s complete satisfaction and was completed in 2001 by a Balfour Beatty business that was discontinued some time ago.

The SFO investigation has determined that there was a failure to keep accurate records within a subsidiary of Balfour Beatty in respect of the contract. No proceedings should be issued against any individual or corporate body arising out of the investigation, and it has concluded that the matter is suitable for civil resolution.

Russell Jones & Walker represented Balfour Beatty in its negotiations with the SFO, led by Rod Fletcher and Jeremy Summers. The team acted for the company throughout the three-year investigation.

Balfour Beatty carried out its own fully-documented internal investigation and self-reported the findings to the appropriate authorities, including the SFO, in April 2005 for further investigation.

Rod Fletcher, head of the Business and Regulatory Investigation department at Russell Jones & Walker, has stated that it has been increasingly clear for some time that the authorities want to take a more American approach to corporate enforcement.

However, because this was the first time such an approach has been deployed, a number of new challenges had to be faced, which were successfully overcome.

It is considered that, in appropriate circumstances, this will provide a template for future enforcement action and that the wider business community will look at this agreement with great interest.