* 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 (Reuters) - 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 leaded fuel.
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 investigations.
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. [ID:nLDE61I1GK]
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)