UPDATED: White Rocks company Mott MacDonald was implicated in Lahmeyer blacklisting saga

adds Mott MacDonald's reaction

Mott MacDonald, part of the White Rocks consortium that has been awarded the rights to develop the area into a sports village, was accused of bribery in 2006 along with Lahmeyer International for the Lesotho Highlands project.

But two years later, the UK’s Serious Fraud Office dropped the investigation into allegations of corruption claiming there “no realistic prospect of a conviction.”

The decision was revealed in a letter to the Liberal Democrat MP Norman Lamb, who today is an advisor to UK deputy prime minister Nick Clegg.

“The UK has been completely toothless in pursuing allegations of corruption,” Lamb had said. “We talk tough and do nothing. I am deeply frustrated that there will be no further action, given the seriousness of the allegations. It leaves the impression that the UK is a soft touch over corruption, and I will seek a fuller explanation for the SFO’s decision.”

Mott MacDonald, which is a partner of a consortium of British firms that will turn the White Rocks area into a sports village, was then alleged to have paid commissions to former senior officials of an $8bn (£5.1bn) hydroelectric project in the southern African state of Lesotho over a period of six years in the 1990s. The total amounts to £282,665.

A forensic audit by Trevor White, a senior investigator at the Durban branch of PricewaterhouseCoopers, alleged Mott MacDonald and its joint venture partner, Lahmeyer International, of Germany, agreed to split the commissions which were paid to the two men up until 1999.

The details emerged in the Lesotho high court during the bribery trial of two Lesotho officials.

Mott MacDonald had described the money as: “a management charge [which] was withheld from MMI professional fees by Lahmeyer. It is normal practice for a lead consultant to be reimbursed in this way for legitimate services it provides in managing the project.”

The PWC auditor said Lahmeyer and Mott MacDonald agreed to pay the former chief executive of the project, Masupha Sole, who is currently serving 15 years in prison for corruption.

In total, Sole received more than £570,000 from the two companies, of which £208,000 was paid by Mott MacDonald, according to the PWC report.

Lahmeyer was already been found guilty of corruption and barred from undertaking any projects for the World Bank until 2013, unless it co-operated fully with the Bank in disclosing its misconduct.

Despite its blacklisting, Lahmeyer managed to win contracts in Malta carrying out evaluation assessments for the Malta Resources Authority, and Enemalta, specifically in the evaluation of the bidders for the Delimara power station extension.

However, the World Bank said Lahmeyer had handed over all the documents on which the allegations against Mott Macdonald were based.

The PWC report concluded: “It is evident from the documents supplied by Lahmeyer... that MMI were responsible for a portion of the commission paid [to the officials]. The amount MMI were responsible for has been calculated on the pound sterling portion of the respective contracts and is clearly identifiable on each of the schedules prepared by Lahmeyer representatives... The calculation of the amount to be paid and the payment thereof was according to documents, however, only done with the prior approval of MMI…”

The sports village at White Rocks is believed to have been awarded to the consortium White Rocks Holding Company Ltd, and its financial partner Resolution Property plc, a major UK real estate fund, without any development brief or tender having been issued.

The project is expected to cater for some 40 sporting disciplines, and includes a rugby stadium and 300 residential units.

The consortium behind the project include: Mott McDonald, which carried out the studies on wind energy generation in Malta; Land Use Consultants, which carried out the EIA for the botched golf course in Rabat; Gleeds, which was involved in ‘brewery redevelopment’ in Malta; Cushman and Wakefield, which have carried out work for the Malta Maritime Authority.

Mott MacDonald statement
"Mott MacDonald today wishes to make clear: Mott MacDonald has never been accused of corruption by any authority in Lesotho, the
UK or anywhere else; we have never been contacted by the SFO in connection with these allegations; we have not been blacklisted by the World Bank, and continue to be engaged on a number of World Bank projects; compliance with all applicable laws, not just those relating to corruption, is taken extremely seriously, and we operate a rigid anti-bribery policy; Mott MacDonald continues to be an entrusted supplier to governments for flagship, nationally strategic projects around the world."