Update on Media Report relating to China
18 December 2009
As you may be aware, during a court hearing in China in August 2009, a Chinese state government official alleged that he had accepted bribes from a number of individuals including the then Managing Director of ERM Shanghai (a subsidiary of the ERM Group).
When ERM management learned of these allegations in August, ERM’s non-executive directors engaged a respected law firm, Covington & Burling (Covington) who also retained PricewaterhouseCoopers to assist them to undertake an independent investigation of the matter. This decision was a serious undertaking to thoroughly investigate the allegations and ensure that, moving forward, we could be assured that ERM’s operations in China would fully meet our Code of Business Conduct and Ethics. Covington’s investigation identified a number of relatively small payments associated with business expenses that the then Managing Director of ERM Shanghai had made to the above official in relation to overseas business trips to evaluate pollution control technologies being utilized at various chemical facilities in Europe and elsewhere. In addition, the then MD of ERM Shanghai indicated that he had personally loaned money to the Chinese official who was a personal acquaintance of many years standing.
The investigation indicated that the above transactions were isolated and made solely by the one individual concerned without the knowledge or approval of ERM Group. However, the transactions clearly violated ERM’s Code of Business Conduct and Ethics. The MD of ERM Shanghai has left the company. Even before the conclusion of the investigation steps were taken to strengthen the financial controls at ERM Shanghai.
We recognise the trust that our clients place in us in working on many of their most challenging projects daily all around the world and expect the highest ethical behaviour and personal integrity in all our transactions. Following the conclusion of the internal investigation and as part of an established and ongoing anti-bribery and corruption training and awareness programme, we are taking every reasonable measure to ensure that all of our staff adhere to ERM’s global values and our Code of Business Conduct and Ethics.
Should you require any further information on the matter, please contact Ann Chilton by telephone on +1 512 374 2243 or on email at ann.chilton@erm.com.
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