UK defence company Ultra Electronics has accepted responsibility for failing to prevent bribery and agreed to pay £15 million following a Serious Fraud Office (SFO) investigation. The penalties are part of a deferred prosecution agreement (DPA) approved by the High Court on Friday.
Details of the Settlement
Ultra will pay a £10 million penalty and £4.8 million to cover the SFO’s investigation costs. The case stems from the company’s use of agents to secure three public sector contracts in Algeria and Oman. The SFO opened its investigation in 2018 after Ultra referred itself to the agency following corruption allegations published by Algerian media.
Graham McNulty, interim director of the SFO, stated: “Bribery undermines that trust and corrodes the systems on which society relies. Today’s outcome underlines the Serious Fraud Office’s determination to investigate and hold companies to account where those standards are breached.”
Contracts in Question
The contracts involved a £200 million deal awarded by Oman’s Ministry of Transport and Communications, a technology and e-commerce solutions contract at Houari Boumediene Airport in Algiers, and an encryption technology contract for Algeria’s Ministry of Post and Telecommunications. The Algerian contracts, which Ultra ultimately did not secure, were expected to generate a profit of £1.4 million.
Reforms and Monitoring
Ultra, now owned by US private equity group Advent International, has agreed to reform its business practices and must provide yearly reports to the SFO for three years to demonstrate the effectiveness of its anti-bribery and compliance programme. The company was listed on the London Stock Exchange until it was acquired by Cobham in 2021 for £2.6 billion; Advent had bought Cobham in 2020.
Significance for the SFO
The agreement is a significant win for the SFO, which has faced setbacks from the collapse of high-profile cases against Serco, G4S, and London Mining. The agency is currently seeking a new director, and its last corporate bribery penalty was in 2022, when Glencore was fined £281 million.
Helen Taylor, deputy director of Spotlight on Corruption, commented: “This DPA is a welcome deal to end a drought of corporate bribery successes for the SFO. Coming at a time of growing geopolitical instability and rising defence spending, this enforcement action sends an important signal to those in the defence industry tempted to cut corners to secure lucrative public contracts.” However, she criticised the penalty level, warning that defence groups might “factor such penalties into the cost of doing business in a high-risk, high-reward sector.”
Previous Canadian Agreement
Three years ago, Ultra reached a similar deal with Canadian prosecutors. The 2023 remediation agreement found the company accountable for bribing officials in the Philippines and defrauding the Filipino government, relating to the procurement of ballistic missile systems for the Philippine national police. Ultra was ordered to pay over 10 million Canadian dollars (£5.4 million) in penalties, surcharges, and forfeiture.
Scope of Investigation
The SFO’s original 2018 investigation focused on Algeria but expanded to include Oman in 2023. In October 2024, the agency announced it was widening the scope further to cover Ultra’s worldwide operations. The SFO noted that it had previously withdrawn from negotiations with Ultra after concluding that “the conditions for a meaningful agreement were not in place.” Negotiations resumed only after “significant changes to the company’s ownership, structure and leadership.”
Ultra stated it had fully cooperated with the investigation and that the SFO acknowledged its “exemplary cooperation and the extensive enhancement to Ultra’s compliance programme” since its acquisition. The company added: “The agreement reached between Ultra and the SFO, approved today by the court, recognises Cobham Ultra’s status as a model of good practice within the defence industry.”
