Wood reaches $177m settlements over Amec FW misconduct
John Wood Group announced on Monday that agreements have been reached with authorities and regulators in the UK, the US and Brazil, to resolve bribery and corruption investigations into the past use of third parties in the legacy Amec Foster Wheeler business.
The FTSE 250 company said the bodies with which agreements have been made were the UK’s Serious Fraud Office (SFO) and the Department of Justice and the Securities and Exchange Commission in the United States, and the Ministério Público Federal, the Comptroller General's Office and the Solicitor General in Brazil.
Under the deals, the company said it would pay compensation, disgorgement and prejudgment interest, fines and penalties totalling $177m (£127.1m).
That would be phased over the next three years, with around $62m payable in the second half of 2021, and the balance to be paid in instalments in 2022, 2023 and 2024.
The amount and payment plan would be as provided for in Wood's financial statements for the year ended 31 December, published in March.
“The investigations brought to light unacceptable, albeit historical, behaviour that I condemn in the strongest terms,” said chief executive officer Robin Watson.
“Although we inherited these issues through acquisition, we took full responsibility in addressing them, as any responsible business would.
“Since our acquisition of Amec Foster Wheeler, we have cooperated fully with the authorities and have taken steps to further improve our ethics and compliance programme from an already strong foundation.”
The company said the resolutions related to historical conduct which occurred before Amec acquired Foster Wheeler in November 2014, and prior to the combined firm's acquisition by Wood Group in October 2017.
Wood said it “cooperated fully” with all authorities in their investigations, reflected in the cooperation credit that Wood received in the respective resolutions.
In relation to the UK, a three-year deferred prosecution agreement relating to the use of third-party agents for bribery and corruption in five countries by Foster Wheeler was agreed with the SFO, and would be the subject of a preliminary Crown Court hearing set down for Monday.
Wood and the SFO would seek final judicial approval of the agreement from the court on 1 July.
The firm said it had has also entered into a three-year deferred prosecution agreement with the US Department of Justice, a cease and desist order with the Securities and Exchange Commission, and leniency agreements with a term of 18 months with the Brazilian authorities, all in relation to the historical use of third-party agents for bribery and corruption in connection with winning a project in Brazil.
Assuming that final judicial approval is received in the UK, the investigations into the legacy Amec Foster Wheeler business would reach a formal conclusion.
Wood said it “continually reviews and enhances” its compliance programme to mitigate the risk of recurrence of similar conduct, and now prohibited the use of sales agents or similar unless required by law.
In light of its remediation actions conducted to date, and compliance improvements, none of the resolutions required the appointment of an independent compliance monitor, but did include certain ongoing compliance obligations to the SFO, the DoJ, and the Brazilian authorities for the duration of the relevant agreements.
“The historical conduct that led to these investigations does not reflect the values of Wood that unite us as a global team,” said chair Roy Franklin.
“The resolutions underline why we attach such importance to upholding the highest standards of ethics and compliance in all parts of the world where we operate, and why we continue to invest in strengthening our governance in this area.”
At 0830 BST, shares in John Wood Group were up 1.15% at 219.7p.