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On The Defensive – 22 July 2013

Member: Nifa

Bribery allegations have been in the news this week, with GlaxoSmithKline’s (GSK) finance chief in China being refused permission to leave the country while an investigation is being carried out into the firm’s Chinese operation, and Formula One boss Bernie Ecclestone being charged with bribery in Germany over the sale of a stake in F1 there.

The two men, both British nationals, protest their innocence but are being investigated by the foreign authorities, so now need to provide evidence of no wrong-doing, which can best be provided by forensic accountants.  Indeed, GSK has recently engaged such a firm to investigate the innocence of Steve Nechelput and others working for GSK’s Chinese operation, while the Wall Street Journal claims that the UK’s Serious Fraud Office (SFO) is also reviewing the bribery allegations, although the SFO refuses to confirm or deny this.

Meanwhile, the banker Mr Ecclestone is accused of bribing to the tune of £8m was recently sentenced to eight-and-a-half years in jail for his part in the matter and has made statements suggesting that Mr Ecclestone is guilty as charged, so the F1 boss will need to put up a solid defence.  Apart from this case brought by the German authorities, Mr Ecclestone is also facing a separate civil claim over the payment, as well as an investigation into the $41.4m commission paid to him by BayernLB Bank.

However, his lawyer is confident that forensic accounting evidence will make it clear that the payment was not a bribe.  Mr Ecclestone has never denied making the payment, but just disputes why it was made.  He is quoted as saying that paying £8m was cheap compared to the £2bn or more it could have been if the UK Revenue thought that he was running the family trust.  In such cases of bribery, a thorough investigation by a forensic accountant, such as a member of our team will determine the truth of the matter.

Author: Roger Isaacs, 22 July 2013

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