Update re Oil-for-Food

RNS Number : 8088X

Weir Group PLC

13 December 2010

 



The Weir Group PLC

Oil for Food

Further to the announcement made by The Weir Group PLC ("Weir" or the "Company") on 22^nd July, 2004 and the disclosures subsequently made in the Company's annual reports and accounts, Weir today announces that it has agreed with the Crown Office in Scotland to plead 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. 

Weir is to be formally charged with these offences later today and it is expected that the case will be heard at the High Court in Edinburgh on 14 December, 2010 following which sentence will be passed.

Following the guilty plea, the Company will be subject to a confiscation order in respect of its benefit from the offences. Subject to the Court's approval, the Company has agreed the amount of this confiscation order with the Crown at £13,945,962.   In addition the Company will be liable to a fine, the amount of which will be decided by the Court following the hearing.

A further announcement will be made after the court hearing.

Lord Smith, Chairman of Weir, commented: "What happened was wrong. As I said in 2004, I am bitterly disappointed that this went on within the Weir Group. Since 2004, when we first disclosed the issue, we have radically overhauled procedures. A strong ethics culture is in place across the Group and it is the reference point for everything we do."

Enquiries:

The Weir Group PLC	0141 308 3726
Helen Walker
Maitland	020 7379 5151
Suzanne Bartch
Rowan Brown

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 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.

 

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