* Chemicals company sets aside up to $40.2 mln
* Innospec: man charged by US was its former Iraq agent
By Dan Margolies
WASHINGTON, Feb 19 Specialty chemicals company
Innospec Inc (IOSP.O) anticipates settling foreign bribery
charges with U.S. and British officials for between $28.8
million and $40.2 million, according to a regulatory filing.
The U.S. Securities and Exchange Commission notified the
company three years ago that it was looking into possible
violations of the Foreign Corrupt Practices Act and other laws
in connection with Innospec's involvement with the United
Nations' Oil for Food Program in Iraq.
The U.S. Department of Justice later notified the company
that it too was investigating the company.
"The subjects into which the SEC and DOJ have inquired
include areas that concern certain former and current
executives of the Company, including our former CEO, who
resigned on March 20, 2009," Innospec said in its annual report
filed with the SEC on Friday.
Last July, the Justice Department disclosed it had charged
a Canadian citizen for his alleged participation in an
eight-year conspiracy to defraud the Oil for Food Program
(OFFP) and to bribe Iraqi government officials in connection
with the sale of a chemical additive used in the refining of
A press release issued by the Justice Department said that
Ousama Naaman allegedly offered and paid 10 percent kickbacks
to the Iraqi government in exchange for five contracts under
the Oil for Food Program. In return, Naaman allegedly received
two percent of the contracts' value and a two percent
commission for securing the contracts.
In its filing on Friday, Innospec said that Naaman was its
former agent for Iraq and that Innospec understood "the
indictment to relate to the matters that are the subject" of
The filing also disclosed that the United Kingdom's Serious
Fraud Office informed subsidiary Innospec Ltd in May 2008 that
it had begun an investigation "into certain contracts involving
British companies" under the Oil for Food Program.
Innospec said the outcome of the various investigations
remained uncertain, but said it had set aside $40.2 million
based on its best estimate of an anticipated settlement range
of $28.8 million to $40.2 million.
Innospec said it was cooperating with the investigations.
The disclosures come on the same day telecoms equipment
gear maker Alcatel-Lucent ALUA.PA said it had set aside 93
million euros ($125.5 million) last quarter to settle a U.S.
bribery investigation that began six years ago.
The Franco-American group said that it had reached
agreements with the U.S. Justice Department the SEC under which
it would pay fines, be put on a three-year probationary period,
and be subject to a French anti-corruption monitor.
The agreement with Alcatel is one of a recent series of
foreign bribery cases settled with the Justice Department under
the Foreign Corrupt Practices Act.
On Feb. 5, BAE Systems (BAES.L) of Britain, Europe's
largest military contractor, said it would pay $400 million to
resolve allegations that it made false statements to the U.S.
government about dealings in Saudi Arabia and other countries.
BAE also reached a settlement with British regulators.
Last week, Bloomberg News reported that Daimler AG
(DAIGn.DE) agreed to pay about $200 million to resolve a
Justice Department investigation into whether it paid bribes to
win overseas business. And US prosecutors are pursuing charges
against 22 individuals who are accused of trying to bride
someone posing as an African defense minister.
(Reporting by Dan Margolies; Editing by Tim Dobbyn)