The UK Serious Fraud Office said Wednesday it has closed its 18-month criminal investigation into Soma Oil & Gas and allegations of corruption in Somalia.
The SFO said there was “insufficient evidence to provide a realistic prospect of conviction.”
The SFO announced the investigation in July 2015. It was based on allegations made in a report by the United Nations Somalia and Eritrea Monitoring Group.
The SFO said Wednesday,
While there were reasonable grounds to suspect the commission of offenses involving corruption, a detailed review of the available evidence led us to the conclusion that the alleged conduct, even if proven and taken at its highest, would not meet the evidential test required to mount a prosecution for an offense.
London-based Soma was founded in early 2013 to explore for oil and gas offshore Somalia.
The SFO investigation involved Soma Oil & Gas Holdings Ltd, Soma Oil & Gas Exploration Limited, Soma Management Limited, and others.
Lord (Michael) Howard of Lympne has been Soma’s chairman since May 2013. He’s the former leader of the Conservative Party in Britain and served as a member of the UK parliament for 27 years. He joined the House of Lords in 2010.
In a statement Wednesday, Soma said it had “cooperated fully with the SFO, provided unrestricted access to documents, data and its staff, and even waived legal professional privilege over confidential material in order to assist the SFO in investigating.”
The company wrote to the Chairman of the UN Security Council in August 2015 to complain that the UN Somalia and Eritrea Monitoring Group had made false allegations.
In 2013, Soma was awarded the exclusive right to conduct seismic surveys of offshore Somalia oil and gas blocks covering about 114,000 square miles. In return, the company can apply for development rights for about 37,000 square miles.
In August this year, Soma asked a London court to close the SFO investigation. The company said the investigation was “a cloud” that could deter investors and lenders and cause a cash shortage.
Soma said it had already spent about $38 million in Somalia.
The company said its request to the court wasn’t a complaint about the conduct of the SFO, which it called “professional and thorough.”
In October the court allowed the SFO investigation to go forward. The court said SFO investigators were “approaching the matter proportionately, with proper regard to the facts of the case.”
Lord Howard said Wednesday the company acknowledged that the SFO had no alternative but to investigate the allegations.
But he said the UN Somalia and Eritrea Monitoring Group’s position was “obviously partisan and completely out of alignment with the international community.”
He said Soma would execute its plan to explore for oil and gas offshore Somalia in 2017 and beyond.
He called Wednesday’s SFO announcement “a welcome vindication of . . . the ethical and transparent governance of Soma.”
Richard L. Cassin is the publisher and editor of the FCPA Blog.