Bribery, a hot potato for firms oblivious of their risk

Mr John Maylam, the former Sainsbury's potato buyer who accepted bribes of £4.9million from potato supplier, Greenvale, was sentenced today to four years imprisonment. The money laundering scheme that Mr Maylam concocted with Greenvale accounts manager, David Baxter, saw Sainsbury’s overcharged by nearly £9 million. Payments were authorised by Greenvale's then finance director, Andrew Behagg.

Mr Maylam’s bribe funded lifestyle included a luxury trip to Monaco, lengthy stays at top hotels, including Claridge's, a £94,000 Aston Martin and dining at expensive London restaurants. He incurred expenses of £20,000 a month and was handed brown envelopes stuffed with cash, with one lump sum given to him via a Luxembourg account to the tune of £1.5 million.

Judge Nicholas Ainley said that it was "very nearly as serious a case of corruption as I can imagine" that involved Sainsbury's "being bribed with its own money".

Maylam colluded with Baxter, his key contact at Greenvale, to inflate artificially the price of potatoes from the firm to a higher rate than the one previously agreed with Sainsbury's.

John Burbidge-King, CEO of Interchange, which helps companies to mitigate bribery and corruption risk, said: “This case illustrates that bribery is very much taking place within some companies in the UK and they may be oblivious to it. Had this been prosecuted under the Bribery Act, subject to whether it was found they had “adequate procedures” in place to have prevented such bribery, both Sainsbury’s and Greenvale might also have been prosecuted under Section 7.

“Bribery is a major business and reputational risk and there is increasing need for transparency in the supply chain. This is another bribery case in the retail sector; the recent Walmart case in Mexico has seriously dented its growth strategy. The increasing trend towards certification and supply chain assurance, such as the BS10500 launched earlier this year, will become necessary to give the boards of companies, procurement agencies, both local and central government, the necessary comfort that processes are in place to mitigate such damaging risk out of the supply chain.”