Update re Oil-for-Food
13 December 2010
The Weir Group PLC
Oil for Food
Further to the announcement made by The Weir Group PLC ("Weir"
or the "Company") on 22nd July, 2004 and the disclosures
subsequently made in the Company's annual reports and accounts,
Weir today announces that it has agreed with the Crown Office in
Scotland to plead guilty to two charges of breaching UN sanctions
in connection with a number of UN sanctioned Oil for Food programme
contracts awarded between 2000 and 2002.
Weir is to be formally charged with these offences later today
and it is expected that the case will be heard at the High Court in
Edinburgh on 14 December, 2010 following which sentence will be
passed.
Following the guilty plea, the Company will be subject to a
confiscation order in respect of its benefit from the offences.
Subject to the Court's approval, the Company has agreed the amount
of this confiscation order with the Crown at £13,945,962.
In addition the Company will be liable to a fine, the amount
of which will be decided by the Court following the hearing.
A further announcement will be made after the court hearing.
Lord Smith, Chairman of Weir, commented: "What happened was
wrong. As I said in 2004, I am bitterly disappointed that this went
on within the Weir Group. Since 2004, when we first disclosed the
issue, we have radically overhauled procedures. A strong ethics
culture is in place across the Group and it is the reference point
for everything we do."
Enquiries:
The Weir Group
plc
0141
308 3726
Helen Walker
Maitland
020 7379 5151
Suzanne
Bartch
Rowan Brown
Notes to editors
Background
In 2004 Weir discovered that during the course of 2000, at the
request of certain Iraqi customers, trading terms were amended. As
a result the prices payable on subsequent Oil for Food contracts
were uplifted by £3.1 million. The Group did not retain such uplift
payments as equivalent sums were paid to an agent acting on behalf
of the Group subsidiaries.
The contracts related to the supply of pump equipment and spare
parts for clean water supply and oil field water injection and
pipelines.
Immediately Weir became aware of an issue it took immediate
action: it commissioned an internal investigation and an external
investigation of all contracts undertaken under the Oil-for-Food
programme and made a public announcement. The external
investigation was undertaken by independent legal advisers, Herbert
Smith. The findings from the investigation are summarised
above.
Following the investigations, the Group reviewed its procedures
and took comprehensive steps to improve its controls and processes.
It regularly monitors compliance. Weir now has in place a strong
ethics culture across the business.
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