Hit for six: the SFO obtains a sixth DPA

The Serious Fraud Office (SFO) has announced its sixth Deferred Prosecution Agreement (DPA), entered into with Güralp Systems Limited (GSL) in October 2019. GSL is a relatively small company producing seismic measurement devices that admitted conspiring to make corrupt payments to an individual in Korea to help obtain business. It also admitted to failing to prevent bribery by its employees, in contravention of section 7 of the Bribery Act 2010.

This announcement comes after the acquittal of three senior members of GSL on 20 December 2019, who were facing charges of conspiracy to make corrupt payments, and the associated lifting of reporting restrictions.

The duration of this new DPA will be five years, during which time GSL will be required to pay a disgorgement of profits of £2,069,861.00, which has been calculated as the gross profit attributable to the corruption. In his judgment approving the DPA, Mr Justice William Davies made clear there is a balancing act to be done between punishing criminal conduct by a company and keeping the company in business, preserving the jobs and livelihoods of innocent employees. Principally for that reason, GSL is not required to pay a penalty or the costs of the SFO under the terms of this DPA and there is no strict timetable for payment of the disgorgement of profits either.

As is typically to be expected, the DPA also provides for a compliance programme, but one is already in place at the company so this is unlikely to require significant additional resource and will focus more on annual reporting of progress to the SFO.

The principal reasons for approving the DPA were as follows:

• GSL self-reported to the authorities after undertaking an internal investigation with the assistance of an independent law firm;
• the individuals responsible for the bribery payments are no longer at the company (in his judgment, Mr Justice Davies stated: “It is axiomatic that a completely different approach now is inherent in the operation and management of GSL”);
• GSL had not previously or otherwise engaged in criminal conduct;
• GSL had taken significant remediation steps since discovering the conduct, including introducing a new compliance programme; and
• a DPA was seen as a sure way to guarantee ongoing co-operation from GSL.

It was also noted that criminal prosecution may result in a fine which, as noted above, would risk harming innocent employees by putting the company out of business.

Once again, this is a case in which the SFO has successfully agreed a DPA with the company, only to have the prosecutions of relevant individuals end in acquittals. This is particularly relevant in this case, where Mr Justice Davies observed in his judgment that: “the alleged criminal liability of GSL is very largely dependent upon culpability on the part of Dr Güralp” (the eponymous founder of the company, now acquitted).

Nonetheless, this will no doubt be seen as a success for the SFO as it closes another investigation having achieved a significant disgorgement of profits from the company without the need to bring criminal proceedings.