Blacklist companies, not just punish corrupt officials – Saleh Al Shaibany 1

Saleh Al Shaibany

Blacklist companies, not just punish corrupt officials –

Sunday Beat – Times of Oman – March 16, 2014

Saleh Al Shaibany

http://www.timesofoman.com/News/Article-31123.aspx

RELATED STORIES 

  Sunday Beat: Oman   needs strict laws to combat corruption

  Sunday Beat: The   corrupt should not escape the consequences

Real justice will not be done until companies whose senior   officials have been convicted on corruption charges are either blacklisted   for a number of years from bidding for the government tenders, or made to pay   heavy fines.

We should follow the regulations the rest of the world   does to make companies accountable for the actions of their employees   representing them.

The excuse that the board of directors cite by saying,   “we knew nothing about it”, does not wash when it is their job to   know about it. It defies logic when hundreds of thousands of rials disappear   in the company’s bank accounts and the chairman says “it escaped my   notice” or simply that “it was hidden from my view” and the   courts believe that statement. A CEO or a managing director will not   authorise the accountant to use the company’s money to bribe a government   official unless he has approval from someone in the board. There is always   that prior arrangement of “you go ahead with it but I will deny it if   you are caught” type of thing which means the bribe had the blessing   from the top.

For justice to go around a full 360 degrees instead of   doing a semi circle, the Oman Tender Board (OTB) must ban the bribing   companies for at least 10 years from any future activities. It is no excuse   that these companies, just because they employ hundreds of Omanis, should get   away with it. If they are allowed to bid again, then they should pay a fine   equivalent to the bid value of the contract in which they were accused of   offering bribe.

Otherwise, it will be morally wrong when one or two   employees, acting under certain instructions, should be made scapegoats for   something bigger than them without any consequences to the company   itself.

The shocking thing is that while the company is being   investigated for bribery charges, it is still in the running to win the next   contract of the project they had bid for prior to the court case. It is like   telling a school boy “don’t climb this tree again but you can climb the   other one at the back but make sure you don’t fall this time.”

Then there is a question of the auditing companies. How   does it escape their expert scrutiny when a large amount of cash was not   accountable for? If a company is listed in the Muscat Securities Market (MSM)   or in the case of a government organisation, surely the auditors must spot   any financial irregularities. If not, where are they looking?

To say that the financials are hidden from their full   scrutiny is again a lame excuse for not doing their job or simply taking for   granted that “all is well” when it is not, as we now find out. For   listed companies, it is the investors’ money that is used to bribe for   contracts where the board of directors are the trustees. It is not business   ethics, as one insider speculated. “Bribery money is the board of   directors’ way of increasing profits for their investors.”

What about the role of the State Financial and   Administrative Audit Institution when it comes to scrutinise the accounts of   the government’s organisations and their employees? We expect such an   institution with wide powers to put under the spotlight any financial   irregularity committed by officials, especially those at the very top, to act   decisively and timely to win the public’s confidence.

If we argue if we should make board of directors of   private companies responsible for their actions, then it makes perfect sense   to make heads of the ministries take responsibility for the spate of   corruption cases in their patches. If their response is that “we were   not aware of it”, then questions should be asked about their competence.   Somebody else should be appointed who will be “aware of it” when it   starts to happen again.

To sum it all up, corrupt companies should not simply   plead ignorance and blame it on their managers to survive to make money   another day. Similarly, heads of ministries cannot shrug their shoulders by   claiming lack of knowledge. It is part of their responsibility and the buck   stops with them. The time for cover-up has long passed. 

You can get in touch with the writer: saleh@timesofoman.com

bribery-in-business[1]bribe 2

REPRODUCED ARTICLE

Omani CEO jailed for 23 years in graft case: Court Reply

OOC boss gets 23 years jail term in graft case

Thursday 27th, February 2014 / 22:47

Written by Oman Observer  in Head stories

Ordered to pay RO 8 million fine; 2 others sentenced – 

By Zakaria Fikry –

MUSCAT — The Court of First Instance in Muscat yesterday sentenced the CEO of Oman Oil Company (OOC) to 23 years in jail, a fine of RO 8 million and ordered him to be sacked from his post permanently in connection with the Sohar Aromatics case.
The second accused in the case — who is a former adviser to the ministry of national economy — was awarded 10 years in jail, a fine of RO 4 million and deportation for a life-long after severing his term.

The third accused — CEO of South Korea’s LGI Corporation — was sentenced to 10 years imprisonment and a fine of RO 4 million as well as deportation for a life-long after serving his jail term. The court also ordered the restoration of $8 million to the public treasury and that the defendants settle the litigation.

Last December the Public Prosecution accused the CEO of Oman Oil Company with abuse of office, accepting bribes from LGI to facilitate a $1.6 billion pact for construction of the a petrochemical aromatics plant at Sohar industrial port for the Korean firm. In return the defendant took $8.4 million in bribe which he deposited in a Swiss bank. The defendant was convicted of exploiting his position for personal interests, bribery and money laundering

The second defendant was convicted of taking bribes and the third — Korean national CEO of LGI Corporation — was found guilty of offering bribe to procure the contract.

*****

Omani CEO jailed for 23 years in graft case: Court

(Reuters) –

A court sentenced the CEO of state-owned Oman Oil Company to a total of 23 years in jail on Thursday for accepting bribes, abuse of office and money laundering, the most severe punishment meted out in a series of corruption trials that began last year.

The judge at the Court of First Instance in Muscat also convicted Adel al-Raisi, a former aide to the minister of the now-dissolved economy ministry, of organizing a bribe made by a senior official at a South Korea-based firm to Oman Oil Company CEO, Ahmad al-Wahaibi, and sentenced him to 10 years in jail.

The court found the vice CEO of the Korean-based LGI, named in court as Myung Jao Yoo, guilty of paying $8 million to a Caribbean-registered company owned by Wahaibi after winning a billion rial petrochemical project in Sohar Port in Oman.

Myung was also jailed for 10 years. LGI was not immediately available for comment on the court’s verdict.

Oman’s Sultan Qaboos has waged an anti-graft campaign to defuse mass protests in several Omani cities in 2011 that were mainly directed against graft and to demand jobs, issues that fuelled uprisings around the Arab world in the same year.

More than 20 civil servants and businessmen have gone on trial in Oman since last year.

Court documents said the latest case dated back to 2011, when Omani authorities were informed by their Swiss counterparts about suspicious transactions involving Wahaibi’s Swiss bank account. The trial began in December last year.

Oman Oil Company is an investment arm of the government of Oman with over 40 investments inside and outside Oman.

Wahaibi admitted in court to receiving money from Myung but pleaded not guilty to the charge of taking bribes, saying he “didn’t know why LGI transferred $8 million” into his company.

Raisi also pleaded not guilty. He said his confessions during questioning were not genuine

and that he only admitted brokering the deal and receiving the money under pressure.

Myung admitted in court that he had received money from Wahaibi but said he did not remember why. “Maybe it was a birthday gift. I don’t remember,” he told the court.

Apart from the prison sentences, Raisi and Myung were each fined 4 million rials. Myung would be deported after serving his sentence, the court ruled.

Oman Oil Company said in a statement it was committed to “enforcing a stringent code of ethics and corporate governance practices across all levels of the organization”.

Its Deputy CEO, Mulham Al Jarf, said he was given the “rights, responsibilities and authorities of the CEO in August 2013 to ensure that the business operations of the company remain uninterrupted,” the statement added.

At the hearings, Wahaibi admitted that after the cash was deposited into the accounts of his company, he had given the two other defendants their shares of the cash.

The court sentenced Wahaibi to 10 years in jail and fined him 4 million rials ($10.39 million) for accepting bribes, 10 years for money laundering and one million rials and three years in prison for abuse of office.

The court also confiscated all the bribe money in his frozen Swiss bank account. Lawyers confirmed Wahaibi’s sentences would run successively.

($1 = 0.3850 Omani rials)

bribe 2 bribery-in-business[1]

Images For Demonstration Purposes Only!

The Corrupt Should Not Escape The Consequences. Reply

 

 Saleh Al Shaibany

The Corrupt Should Not Escape The Consequences.

Sunday Beat – Times of Oman – By Saleh Al Shaibany – saleh@timesofoman.com

MUSCAT: Take this example of a man who is paid about OMR2,000 a month, is driving an expensive car and owns a building that has 40 flats, 12 shops and a basement parking. Where did he acquire all this wealth from?

Oh, I almost forgot. He also owns a home at Jumeirah Beach in Dubai and a posh flat somewhere in Malaysia. Corruption seems to be deeply entrenched in our society. It is now like second nature in our lives. Yet, such officials or company employees have escaped detection of corruption for the last 40 years.

They have been amassing millions of rials of ill-gotten funds over the years and now they think getting kickbacks is part of the business deal. They also feel it is their divine right to pick the pockets of the government.

As one western oil executive once told me, “if you want to retire in Acapulco, be an official in the Omani energy sector.”

The question everybody asks is, why only now we see a series of corruption cases going to court? Is it because our oil wealth is starting to decline at the time when we have problems balancing the fiscal budget? Or is it that it is too widespread that ordinary people cannot tolerate anymore?

Investment prospects

Whatever the answer is, if corruption is not rooted out immediately, it will hurt our foreign investment prospects. At this rate, the Sultanate’s credibility as an investment destination will fare no better than the so-called banana republics.  The only way to stem it, is to punish the culprits by handing them long sentences. In the past, offenders of corruption in the isolated cases — we had seen — got away with lighter prison terms.

The well connected even escaped convictions. It is time they face the consequences of their greed. For justice to be served, perhaps, it is also time to make sure the corrupt are not probing the fellow corrupt. There is a club in our midst that protects each other.

The government also needs to make sure that companies, not just their officials, offering bribes do not get away with it. Such companies should be struck off from bidding future contracts, no matter how well connected they are.

If the court finds them excuses and they are allowed to bid again, the message will be out that it is alright to ‘reward’ government officials. Then we are not going anyway and these corruption court cases are just a lip service.

The second message, perhaps more devastating, will be to young people and future leaders that plundering the national wealth is part of the Omani way. They will learn that if you cannot have one hand in the government’s cash register then ‘you are not the man.’

It is happening this way. When you get 10 per cent from a bidding company, it does not come from their bank. They just make the government pay 10 per cent more so it can end up in your pocket. Corrupt officials have either been clever all these years or the probing team has been looking elsewhere when it comes to hiding the bribe money. It is stashed away in the accounts of their spouses, siblings or children. Sometimes even with closed friends. They are not foolish enough to do it here but in overseas accounts.

Then they move back to Oman to clean the money tainted with filth by buying that block of flats. Hang on; not in their names but in  names of their children. And here one wonders if our anti-money laundering laws have any teeth at all. Without any doubt we are in a danger of being embroiled in the whims and desires of crooked officials who know that they can find a safety net when they fall.

We are also living in a business environment of contracting companies, both local and international, which can tempt officials with a bag of cash without fear of being punished because their directors belong in the same fraternity club as the probing team.

The members of the public are waiting anxiously to see whether the current court cases of corruption can find anybody guilty, whether a bribing company or the receiving individuals.

And for that matter, if the probers could go deep enough to uncover more cases that stretch back for a number of years. We all know the current cases are just a tip of the iceberg of the scale of corruption the country is in.