Ex-finance director at arm of FTSE 100 company claims officials received holidays and cash for lucrative contracts. A subsidiary of Compass Group, the FTSE 100 catering firm, paid bribes to Kazakhstan government officials and has been reported to the Serious Fraud Office, according to allegations made public by a whistleblower.
The accusations came to light at an employment tribunal on Monday, where a former finance director of a second Compass subsidiary in Kazakhstan was suing his former employer for unfair dismissal.
Legal papers in the case allege that a Kazakhstan government official and his family enjoyed a $19,000 (£12,000) holiday in Dubai at the expense of a Compass venture in Kazakhstan called Kaz Munay Gaz Services Compass (KMGSC); another official is said to have had his son's US university fees paid by the firm, while the subsidiary also stands accused of "circumvent[ing] government procedures to supply luxury vehicles to KMG, a related government entity".
Karim Pabani, who was finance director of a second Kazakh subsidiary, ESS Support Services LLP, between 2011 and 2013, also says that profits at KMGSC were inflated and that he was asked to "falsify accounting records". He claims he was dismissed after repeatedly raising his concerns, which included reporting a "financial exposure [of] £5.4m" in a "major risk assessment report" sent in February 2013 to the office of Mark White, Compass's general counsel.
The documents add: "KMGSC had previously permitted the supply of food unfit for human consumption through KMGSC at excessive prices. [Pabani's disclosures on the topic] covered numerous serious stock issues and specifically requested that Anthony Jukic [former managing director of ESS] and Ron Kulkarni [Jukic's successor] request a repayment of $500,000 from KMGSC for overpayment to suppliers. These suppliers were considered to be associates of Timur Kurenbekov [KMGSC managing director, who is related to a senior figure in the Kazakhstan government]."
A spokesman for Compass Group said: "Compass Group is aware of the allegations which have been made by Mr Pabani in the claim which he has submitted to the employment tribunal and is vigorously defending this claim."
He would not comment directly on the specific allegations or supply comment on behalf of the individuals named in the claim. The SFO did not comment.
After raising his concerns during a series of disclosures between 2011 and 2013, Pabani says he was asked to attend a meeting with Kulkarni, his direct boss, in May 2013, when he was told he would be dismissed. The documents state: "The claimant informed Mr Kulkarni that he had already documented his concerns in a letter to the Serious Fraud Office."
Compass Group is one of the largest companies listed on the London Stock Exchange with a value of almost £17bn. Its chief executive Richard Cousins has been widely tipped to take on the chairmanship of Tesco.
The caterer has previously had to deal with corruption allegations and in 2006 agreed to pay up to £40m to settle two lawsuits brought against it for allegedly bribing a UN official to win contracts worth millions of pounds to supply UN peacekeepers. Compass did not admit liability in the UN case.
The Guardian, Monday 3 November 2014
