ICBC Standard Bank, until recently the investment banking unit of South Africa’s Standard Bank, is preparing to pay up to $40m (£26.59m) in UK fines as part of the first deferred prosecution deal secured by the Serious Fraud Office.
The settlement relates to undisclosed alleged wrongdoing dating from 2012-13, the South African lender said in a statement to investors. Both the SFO and ICBC Standard Bank will ask a UK judge to approve the settlement.
The SFO insisted that full details of the facts of the case and the terms of the settlement would be set out in open court on Monday. The approval from Lord Justice Leveson is expected to be a formality as he has already agreed to it in principle during an earlier hearing that took place in private.
Under the previous SFO director Richard Alderman, prosecutors had struck deals behind closed doors with corporate defendants. These deals, known as civil settlements, were criticised for being too weak and for allowing companies to keep evidence of wrongdoing from the public eye.
Deferred prosecution agreements (DPAs) were introduced in February last year. They allow prosecutors to suspended a prosecution for an agreed period of time, and then withdraw it. In exchange, companies must pay a fine, repay related profits and assist in the prosecution of any individuals.
Standard Bank Group told investors any agreed payment is not expected to exceed $40m. Industrial and Commercial Bank of China took a 60% controlling stake in the London division in February this year, though it agreed any penalty relating to matters under SFO investigation would be borne by the South African lender.
The SFO has said it expects to have secured a second DPA by the end of the year. It is currently investigating an unprecedented number of large, stock market-listed companies, including Tesco, Barclays and Rolls-Royce, some of which are reportedly exploring DPA options.
