Private equity could fall foul of Bribery Act

PRIVATE equity firms in the UK could be held liable for bribes paid by officials at companies they own, the Serious Fraud Office has said, following uncertainty in the sector as to what it would mean for business.

SFO director Richard Alderman warned private equity clients of the law firm Debevoise & Plimpton LLP in London this week that they could be face prosecution for bribes even though they know nothing about them although they will have received the benefit through dividends or other distribution.

“As owners of companies, private equity, as well as the big institutional shareholders, has a responsibility to society to ensure that the companies in which they have a shareholding operate to the right standards,” Alderman said.

The Bribery Act, which will come into play on 1 July, will make it a corporate offence for failing to prevent bribes paid in the UK and abroad.