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Aiolfi, Gemma; Pieth, Mark --- "International Aspects of Corporate Liability and Corruption" [2005] ELECD 216; in Tully, Stephen (ed), "Research Handbook on Corporate Legal Responsibility" (Edward Elgar Publishing, 2005)

Book Title: Research Handbook on Corporate Legal Responsibility

Editor(s): Tully, Stephen

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843768203

Section: Chapter 22

Section Title: International Aspects of Corporate Liability and Corruption

Author(s): Aiolfi, Gemma; Pieth, Mark

Number of pages: 18

Extract:

22 International aspects of corporate liability
and corruption
Gemma Aiolfi and Mark Pieth




Introduction
In September 2003 the shares of Statoil, the Norwegian oil company, took a
beating: over a three-week period the value of the shares fell by 11 per cent,
whereas the crude oil price had declined by only 2 per cent in the same time
span. The cause of this unexpected price drop was the revelation that the
company was possibly implicated in bribery in its international business deal-
ings. The news reports allege that Statoil had signed a contract for advisory
services with an Iranian intermediary, named M.H. Rafsanjani, the son of the
former Iranian president. The contract provided for a $15 million fee to be
paid over an 11-year period. The Norwegian financial crime police announced
that a payment of $5.2 million of Statoil money had wound up in an account
in the Turks and Caicos Islands belonging to a consulting company registered
in the UK (Horton Investment) and which appears to have been used in the
transaction. The services that the Iranian consultant was supposed to render
included supplying information on social developments in Iran, but the whis-
tle was blown by internal audit staff at Statoil, with the resulting furore in the
world press. Within two weeks the chief executive officer of Statoil, the chair-
man, and the head of exploration, all resigned from their posts. It would appear
that once this had happened, the share price began to ...