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UK fraud agency must honour redundancy deals

Source: Thomson Reuters Foundation - Tue, 4 Dec 2012 17:49 GMT
Author: Reuters
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    LONDON, Dec 4 (Reuters) - Britain's Serious Fraud Office cannot renege on severance deals that were agreed by Richard Alderman, its former head, but not officially approved by its paymasters.

   The SFO will honour 450,000-475,000 pound ($724,000-$765,000) redundancy payments to former chief executive Phillippa Williamson and chief operating officer Christian Bailes, Attorney General Dominic Grieve and the SFO's new head David Greensaid in a written statement to parliament.

   "On learning of these agreements, the current director sought legal advice on whether these arrangements may be reopened and money recovered," they said on Tuesday. "The advice he received is that the agreements, whilst entered into without the necessary approvals, are binding on the SFO."

   The government auditor - the National Audit Office - last month refused to sign off the SFO's accounts because of an "irregular" severance payment for Williamson.  

   Since then, Green - accountable to parliament for the money the SFO spends - discovered a further such deal for Bailes. To ensure transparency, Grieve and Green outlined all redundancy payments agreed under Alderman since May 2010.

   Bailes will be made redundant this month. Green now needs to retrospectively seek appropriate approval for his pay-off.  

   Under an early retirement deal at the end of a four-year term in April, Alderman also received a 44,200 pound pension payment when he left, according to the statement.

   The SFO, which investigates international bribery, corruption and fraud on an annual budget of around 31 million pounds, has to count its pennies.

   It has been hit by a 200 million pound damages claim after it botched an investigation into property magnates Vincent and Robert Tchenguiz.

   The SFO has already been told to pick up the lion's share of the brothers' legal fees, estimated at up to 3.0 million pounds. The Tchenguiz affair predates Green's arrival. ($1 = 0.6213 pound)

(Reporting by Kirstin Ridley; Editing by Dan Lalor)

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