Update re Oil-for-Food
The Weir Group PLC
Oil for Food
Further to the announcement made on 13th December, 2010, The Weir Group PLC ("Weir" or the "Company") announces that the hearing held at the High Court in Edinburgh earlier today has concluded.
The Company pleaded 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.
Following the guilty plea, Weir has been subject to a confiscation order in the sum of £13,945,962. In addition it has been fined £3 million.
These financial penalties will be paid before the year end and will be treated as an exceptional item after taking account of approximately £5 million of provisions.
Current trading remains strong in line with the Company's update last month and our expectations for the full year remain unchanged.
Lord Smith of Kelvin, Chairman of Weir commented: " What happened back in 2001 was wrong and we accept full responsibility. Today's decision finally draws a line under the Crown Office's Oil-for-Food investigation which we believe is in the best interests of shareholders.
"Since 2001 Weir has been transformed. We have a different board and a different management team all of whom are committed to doing business at all times in an ethical manner. Today we have in place robust ethical policies and procedures and operate a zero tolerance approach to any behaviour that contravenes them.
"The board regards as an absolute priority ensuring the Group operates with integrity. I am confident that we have in place the right culture and the necessary policies and procedures to ensure that it does. "
Enquiries:
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The Weir Group plc |
0141 308 3726 |
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Helen Walker |
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Maitland |
020 7379 5151 |
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Suzanne Bartch |
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Rowan Brown |
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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 then 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.
This information is provided by RNS
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