UK defence firm Ultra Electronics to pay £15m after SFO bribery investigation | Serious Fraud Office
British defense company Ultra Electronics accepted responsibility for failing to prevent bribery and agreed to pay £15 million following an investigation by the Serious Fraud Office.
The fines are part of a suspended investigation approved by the high court on Friday, following an investigation opened in 2018 when the company approached UK law enforcement a month after allegations of corruption were published in Algerian media.
The SFO agreed to pay a £10 million fine and £4.8 million to cover the costs of the investigation, after Ultra admitted failing to prevent bribery linked to three sought-after public sector contracts through the use of agencies in Algeria and Oman.
The SFO’s interim director, Graham McNulty, said: “Bribery undermines that trust and erodes the systems on which society depends. Today’s outcome underlines the Serious Fraud Office’s determination to investigate and hold companies to account where these standards are breached.”
The contracts in question were a £200 million deal awarded by Oman’s ministry of transport and communications; another was for technology and e-commerce solutions at Houari Boumediene airport in Algeria, and the third was for encryption technology for the Algerian ministry of post and telecommunications. The Algerian contracts, which the company ultimately failed to secure, were expected to make a profit of £1.4 million.
Ultra, which is ultimately owned by US-based private equity group Advent International, agreed to take steps to reform its business practices and must submit annual reports to the SFO for the next three years to demonstrate the effectiveness of its anti-bribery and compliance program.
Ultra was listed on the London Stock Exchange until it was acquired by rival British defense company Cobham in 2021 in a £2.6bn deal. Advent acquired Cobham in 2020.
The deal represents a much-needed win for the SFO, which has been hit by the collapse of high-profile cases against companies including Serco, G4S and London Mining. The agency is looking for a new leader and last fined mining company Glencore £281 million in 2022 for corporate bribery.
Helen Taylor, deputy director of the not-for-profit Spotlight on Corruption, which is tracking the case, said: “This DPA is a welcome agreement for the SFO to end a drought of corporate bribery successes. Coming at a time of geopolitical instability and rising defense spending, this enforcement action sends an important signal to those in the defense industry who are tempted to cut corners to secure lucrative public contracts.”
But he condemned the level of the penalty and said there was a risk that advocacy groups would “include such penalties into the cost of doing business in a high-risk, high-reward industry.”
Three years ago Ultra made a similar decision Agreement with prosecutors in Canada. The 2023 recovery agreement found the company responsible for bribing two officials in the Philippines and one count of defrauding the Philippine government.
The crimes, which occurred between 2006 and 2018, were related to the purchase of ballistic missile systems for the Philippine national police, and the company was ordered to pay more than 10 million Canadian dollars (£5.4 million) in fines, surcharges and forfeiture costs.
While the original 2018 SFO investigation concerned Algeria, it was expanded to include Oman in 2023. In October 2024, the scope was expanded to include the company’s worldwide operations, the agency said.
The SFO said on Friday it had previously withdrawn from talks with Ultra after concluding that “conditions for a meaningful agreement did not exist”. Negotiations only resumed after what was described as “significant changes in the ownership, structure and leadership of the company”.
In a statement, Ultra said it was cooperating fully with the investigation and that the SFO “recognizes Ultra’s exemplary cooperation and the extensive improvement to Ultra’s compliance program” since the acquisition.
The statement said: “The agreement reached between Ultra and the SFO, approved by the court today, recognizes Cobham Ultra’s status as a model of good practice in the defense industry.”
