Weir Group to be sentenced over sanctions breaches

Engineering firm Weir Group is expected to appear at the High Court in Edinburgh today for sentencing on two charges related to breaches of United Nations’ sanctions against Saddam Hussein’s regime in Iraq.

The Glasgow-based firm said in a statement to the London Stock Exchange yesterday it had agreed with the Crown Office to plead guilty to incidents related to contracts it was awarded in the UN-sanctioned oil for food programmes in Iraq between 2000-2.

In 2004, Weir, which makes pumps and valves for the oil industry, said it had made irregular payments to an agent who arranged the contracts in Iraq.

Weir said yesterday it was facing an agreed £13.945million confiscation order as well as a fine, the amount of which will be decided by the court.

Weir Group chairman Lord Smith added in the statement: “What happened was wrong. As I said in 2004, I am bitterly disappointed that this went on within the Weir Group.

“Since 2004, when we first disclosed the issue, we have radically overhauled procedures. A strong ethics culture is in place across the group and it is the reference point for everything we do.”

The oil for food programme was designed to allow Iraq to sell oil in exchange for food, medicine and other humanitarian needs without allowing Saddam’s regime to boost its military capabilities.

Weir had in 2000, at the request of Iraqi customers, amended trading terms for contracts, the result of which was the price of them being increased by £3.1million and that cash going to the agent.

The contracts related to the supply of pump equipment and spare parts for clean water supply and oil field water injection and pipelines.

Last month Weir said it expected profits to be ahead of previous expectations as it was benefiting from the growing global demand for oil. It forecasted profits for the second half of 2010 of about £145million – a £50million increase on the same point a year ago.

Weir, which was founded in 1871, employs 11,000 staff. Its other UK operations are Manchester, Elland in Yorkshire, Alloa and East Kilbride.

Breaking