December 12, 2007

Lesotho water project corruption investigation 'undecided'

No decision has been made on whether to launch a corruption investigation into the British company Mott MacDonald, UK's Serious Fraud Office (SFO) have said. The company has been accused of bribing two Lesotho officials over a multi-billion-dollar water project. The matter is now also being investigated by the European Union.
The Lesotho Highland Water Project was one of the largest engineering projects ever undertaken in southern Africa, reversing the flow of rivers in Lesotho and sending them north, to provide water and electricity to the industries and towns of South Africa. But it also suffered from the scourge of corruption. Several international companies were charged with bribing Basotho officials, and the chief executive of the project, Masupha Sole, was jailed for 15 years for receiving bribes. A German company, Lahmeyer, was among the companies convicted of corruption. When Lahmeyer was faced with a second charge of bribing officials in the commission overseeing the project, they agreed to co-operate with the courts, and gave details of their activities with their partners, Mott MacDonald. These papers were scrutinised by the auditors, PricewaterhouseCoopers. They provided evidence that two senior Lesotho officials had received payments worth $147,000 from Mott MacDonald. This evidence was laid before a Lesotho court during the case against Lahmeyer. But because the project had been concluded, and no-one working for Mott MacDonald was any longer in Lesotho, the authorities had nobody to prosecute. Lesotho passed the evidence to the UK's SFO and asked them to act. A year later, the SFO it has yet to decide whether to conduct an investigation. (rts)

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