Tuesday, December 1, 2020

UK’s airline services group to pay $3.8m fine in bribery case

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A U.K. judge approved a deferred prosecution agreement between commercial aircraft interior refurbisher Airline Services Ltd. and the U.K.’s Serious Fraud Office to resolve allegations the company failed to prevent bribery.

Airline Services, a Manchester, U.K.-based company no longer engaging in business activity, reached an agreement in principle with U.K.’s white-collar-crime prosecuting agency last week. The terms of the agreement were approved by Mrs. Justice May at a public hearing in Southwark Crown Court on Friday, according to the SFO.

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Under the terms of the agreement, Airline Services admitted to three counts of failure to prevent bribery arising from its alleged use of an agent to win contracts to reequip airliners for Deutsche Lufthansa AG, according to the SFO. The company also agreed to pay close to £3 million ($3.8 million) in penalty and disgorgement.

The agreement enable Airline Services to avoid future prosecution as long as it complies with the terms of the agreement, including the payment of a penalty and full cooperation with the SFO and any other law enforcement agency for investigations of individuals. The agreement is set to expire in one year.

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Airline Services is no longer operating as a business but will be kept open to fulfill the terms of the agreement, the SFO said.

Airline Services allegedly gained illicit competitive advantage through an agent who was also working for Lufthansa—first as a consultant and then an employee—and helped the company secure three contracts from 2011 to 2013 to refurbish Lufthansa fleets, SFO said.

These contracts, including two related to seat modifications and another for brand panels for Lufthansa fleets, were together worth more than £7.3 million, the SFO said.

Airline Services disclosed the alleged violations to the SFO in 2015 after an internal investigation, according to Mrs. Justice May’s judgment for the agreement.

Attorneys representing Airline Services declined to comment.

A spokesperson for Lufthansa said the company learned of the SFO’s investigation into Airline Services during an official inquiry in 2018, then Lufthansa conducted its own internal investigation into the area concerned.

“In the course of this investigation, it was confirmed that a former Lufthansa consultant, who was later also employed by Lufthansa, had received monetary benefits in connection with the award of contracts for the modification of aircraft seats to Airline Services Limited,” the spokesperson said in an email. “At the time, Lufthansa separated from the employee in question with immediate effect and filed a criminal complaint.”

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