Bank Summoned in Bribery Probe -- WSJ
September 12 2017 - 3:03AM
Dow Jones News
U.K. regulator wants Standard Chartered to discuss whistleblower
claims of misconduct
By Ben Otto in Jakarta and Margot Patrick in London
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 12, 2017).
The U.K. financial regulator has summoned Standard Chartered PLC
officials to a meeting this week over a whistleblower's claims of
misconduct at an Indonesian power plant builder owned by the bank,
people familiar with the matter said.
The meeting, set by the Financial Conduct Authority, adds to the
international scrutiny of the London-based bank related to Maxpower
Group Pte. Ltd. at a time when the U.K. is strengthening provisions
for whistleblowers.
The Bank of England is also in contact with the FCA about the
Maxpower whistleblower's allegations, documents seen by The Wall
Street Journal show.
The Journal reported last year that an internal audit and a
separate probe at Maxpower by a law firm found evidence of possible
bribery and other misconduct to win and maintain contracts.
Standard Chartered reported the findings to the U.S. Department of
Justice and other authorities. The department began an
investigation into the allegations as well as whether Standard
Chartered took adequate steps to prevent or stop the alleged
misconduct, people with knowledge of the matter said.
Maxpower specializes in setting up gas turbines for electricity
production, primarily in Indonesia and often in remote locations of
the archipelago nation. Standard Chartered holds a majority stake
in the company through investments by its private equity unit. The
head of the unit, Nainesh Jaisingh, is one of two remaining members
of Maxpower's board.
The whistleblower at Maxpower has alleged that company
executives paid bribes to win business and that Standard
Chartered's representatives on the board failed in their oversight.
The employee, who has been negotiating an agreement to separate
from Maxpower, alleges facing intimidation and retaliatory measures
from executives of both companies, documents reviewed by the
Journal show.
The whistleblower has also alleged that Standard Chartered
executives on Maxpower's board were aware of potentially fraudulent
accounting and compliance failings and didn't act.
Two of the three Standard Chartered executives who sat on the
board of Maxpower during the period in question -- around 2012 to
2015, according to the probe by a law firm -- left the firm last
year. Mr. Jaisingh was put in charge of selling off Standard
Chartered's private-equity investments after his former boss was
pushed out of the unit in November, a person familiar with the
matter told the Journal last year.
Standard Chartered declined to comment on the FCA's summon for a
meeting and Maxpower didn't respond to a request for comment.
Treatment of whistleblowers at U.K. banks came into focus when
Barclays PLC in April said Chief Executive Jes Staley was being
investigated by the FCA and the Bank of England's Prudential
Regulation Authority. Mr. Staley tried to identify an anonymous
whistleblower who wrote to Barclays. Mr. Staley apologized for
trying to track down the source of what he said he saw as "an
unfair personal attack" on a colleague.
The FCA oversees conduct of financial firms and their employees
and has power to prosecute crimes, fine individuals and companies
and withdraw business authorizations. Last year it introduced
measures to make it easier for staff to report concerns or
information on alleged wrongdoing at a firm, and to ensure firms
handle the claims appropriately.
It handled 900 cases from whistleblowers in the year to March
31. The figure fell from the previous two years, which the FCA
attributes to better procedures for employees to report concerns to
their companies first.
Write to Ben Otto at ben.otto@wsj.com and Margot Patrick at
margot.patrick@wsj.com
(END) Dow Jones Newswires
September 12, 2017 02:48 ET (06:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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