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EFT Ltd under investigation by SFO in connection to corruption allegations in Bosnia : Corruption Case


In March 2005. according to reports published by the Guardian newspaper, EFT Ltd , an electricity trading enterprise with headquarters in London, was being investigated by the UK's Serious Fraud Office (SF) for alleged corruption in the Balkans - the first significant attempt by the SFO to enforce new anti-bribery law that make it a criminal offence for a UK company or individual to bribe a public official overseas.

The investigation followed the findings of special audits commissioned by The UN's High Representative in Bosnia, Paddy Ashdown, which alleged that kickbacks may have been solicited by state power company officials to write advantageous electricity-swap contracts with private companies and that US government aid of $ 11m (donated by its development agency USAid) for providing electricity to war-torn states in the region was diverted to offshore accounts.

"The public utilities have been used as cash cows to line the pockets of politicians and others," Lord Ashdown told the Guardian. He has dismissed the head of the Republika Srbska state power company for mismanagement. "I have no doubt that illegal, corrupt money is used to protect war criminals," he said.

EFT is not accused of being involved with war criminals but the report called for the Serious Fraud Office to investigate dealings between the Republika Srbska power company and EFT. It said: "Controls over energy sales and exchanges are lax and therefore open to manipulation and kickbacks. Since we do not have access to the books of EFT, we were not in a position to determine if these weaknesses were taken advantage of. However, we are at a loss to explain [the power company's] actions toward EFT and believe further investigation by the appropriate authorities is warranted." Large offshore transactions through Jersey in the Channel Islands linked to the Balkan power companies were also under investigation. EFT denies making such offshore payments.

The Guardian also reported that the corruption accusations have caused friction between Lord Ashdown's office and trade-conscious UK diplomats backing EFT as a British company.

"This company felt that they had not been consulted prior to the publication of the report. They essentially wanted to have their case heard." a spokesman said. "The ambassador merely helped them talk to the institution which had appointed the auditor". EFT was entitled to help - "It is incorporated in the UK".

The London lawyers defending EFT Ltd, Clyde & Co, presented Lord Ashdown with a detailed rebuttal, saying the report was "defamatory" and "reaches some damning conclusions on flimsy evidence".

Later in March 2005 EFT Ltd went to the High Court to secure the return of files seized by the Serious Fraud Office (SFO) in a series of London raids. If EFT's court challenge succeeds it would have the effect of blocking the transmission of files to prosecutors in Bosnia.


The following lists all references contained in our database that are relevant to this briefing
The Guardian [2/15/2005] 'Fraud Office looks into British energy firm's role in Balkans Company' by David Leigh, Rob Evans: http://www.guardian.co.uk/uk_news/story/0,,1414765,00.html [Source ID = 13066]

The Guardian [2/26/2005] 'Fraud Office in legal battle over Balkan aid inquiry' by David Leigh, Rob Evans: http://www.guardian.co.uk/print/0,3858,5135864-103690,00.html [Source ID = 13124]

The Guardian [7/23/2005] 'Firm loses fight to block corruption inquiry' by Rob Evans, David Leigh: http://politics.guardian.co.uk/foi/story/0,9061,1534773,00.html [Source ID = 13827]

Press Association [7/22/2005] 'ENERGY FIRM LOSES CHALLENGE TO FRAUD PROBE DOCUMENTS SWOOP' : http://politics.guardian.co.uk/foi/story/0,9061,1534773,00.html [Source ID = 13828]

The Guardian [2/15/2005] 'Fraud Office Looks into British Energy Firm's Role in Balkans' by David Leigh, Rob Evan: http://politics.guardian.co.uk/foi/story/0,9061,1534436,00.html [Source ID = 13969]


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