Ultra Electronics DPA – Lessons From The First SFO DPA In Five Years

Summary

The SFO has agreed its first DPA in five years in relation to a failure by Ultra Electronics to prevent bribery in Oman and Algeria. The case provides a reminder of the importance of tailoring anti-bribery and corruption policies and procedures to the specific risks a company faces. In circumstances where the company had changed ownership after the relevant conduct took place, it highlights the impact of post-acquisition compliance overhaul and compliance uplift on DPA negotiations. It also provides further insight into the concept of “exemplary cooperation” in SFO investigations. 

Briefing

On 1 May 2026, the Crown Court approved a deferred prosecution agreement (“DPA”) between the Serious Fraud Office (“SFO”) and Ultra Electronics Holdings Limited (“UEH”) in relation to three counts of failing to prevent bribery, contrary to section 7 of the Bribery Act 2010 (the “UKBA”). 

As the first DPA entered into by the SFO in almost five years, and the first since the introduction of new SFO guidance for corporates on cooperation and enforcement (covered in detail by our previous post available here), the DPA is notable for the expansive interpretation of the concept of “exemplary cooperation” and for emphasising the key role that credible post-acquisition compliance uplift and management changes can play in reaching a resolution.   

Background

UEH is a British defence and aerospace electronics company that was formerly listed on the London Stock Exchange before being acquired by Advent International, a US private equity firm, and taken private in 2022. One of its subsidiaries, Ultra Electronics Limited, operated a dedicated civil aviation unit – Ultra Electronics Airport Systems (“UEAS”) – which supplied IT infrastructure for international airport projects.

The DPA is the culmination of an eight-year investigation into potential bribery and corruption by UEH employees and agents in multiple jurisdictions, which began in 2018 after UEH submitted a self-report. The SFO invited UEH to enter DPA negotiations concerning the Algerian conduct in 2021. However, in July 2022, at a late stage in negotiations and shortly before it was acquired by Advent International in August 2022, UEH disclosed information regarding the conduct of Ultra Group employees in Oman that had not previously been reported. UEH provided the SFO with copies of a report from an internal investigation conducted in 2015 which had not identified evidence of bribery and corruption, but the SFO did not accept UEH’s analysis of that material. The SFO withdrew from DPA negotiations in November 2022 and subsequently expanded its investigation to cover additional jurisdictions.

Following the acquisition by Advent, the new owners replaced UEH’s management, brought in new internal and external legal counsel and installed a new compliance team. The SFO considered the company’s cooperation to have been exemplary, noting that UEH presented detailed findings from its internal investigations to the SFO, including narrative reports supported by privilege waivers, facilitated interviews with former employees, assisted the SFO in identifying and providing potentially relevant material and information and facilitated SFO access to legacy group entities and their data.

Although the investigation spanned several jurisdictions, the DPA only relates to conduct connected to three public sector contracts in Oman and Algeria. Misconduct was identified in China, but charges were not brought as the relevant conduct took place before section 7 of the UKBA was in force. More specifically, the Statement of Facts sets out that: 

• Between July 2011 and July 2012, persons associated with UEH bribed officials in connection with a major IT and systems project for Muscat and Salalah airports in Oman worth approximately £150–£200 million. Payments totalling 800,000 Omani rial (approximately £1.3 million at the time) were made to an Omani company, Golden Way, for consultancy services, which are alleged to have been used to pay an official for assistance in winning the contract. UEAS won the contract, but it ultimately proved to be significantly loss-making, with UEH reporting a loss of £31.8 million in its 2014 accounts. 
• Between May 2016 and August 2017, persons associated with UEH sought to bribe senior Algerian officials in connection with a bid for the provision of IT and e-commerce solutions at Houari Boumediene Airport in Algiers, through substantial commission arrangements under consultancy agreements with Algerian agents. Several payments were made to an agent as reimbursement for bribes, and although UEAS was ultimately unsuccessful, the company was provided with sensitive pricing data during the tender process. 
• Between July 2016 and July 2017, persons associated with UEH arranged consultancy agreements including a USD 4 million fee and a separate USD 1.5 million agreement, which it is alleged were intended to facilitate corrupt payments to senior officials to influence a tender for public key infrastructure works for the Algerian Ministry of Post and Information and Communication Technologies in favour of the Ultra consortium. Payments under these contracts were contingent on a successful bid and so were not made as the UEH entity was not awarded the contract. 

UEH accepted that, during the relevant period, it did not have in place adequate anti-bribery and corruption policies and procedures. The Statement of Facts indicates that although UEH did have some policies and procedures, these were not tailored to the risks the company faced while operating in high-risk jurisdictions. For example: 

• UEH did not have a formal process for conducting anti-bribery and corruption risk assessments;
• the policies and procedures in place in relation to joint ventures and consortia lacked detail, did not establish proper oversight mechanisms and in fact allowed limited oversight of Ultra Group employees acting in joint ventures, and were generic (i.e. not tailored to the actual risks the company faced);
• existing controls, such as the need to complete specific forms and obtain authorisation before submitting a bid, were not applied consistently or were easily circumvented or ignored by employees; and
• policies and procedures were not kept up to date and contained errors which led to certain countries being incorrectly classified as low risk. As a result, incorrect controls were applied and agents in Algeria were not subject to more extensive due diligence.

Terms of the DPA

Under the terms of the DPA, which is effective for three years, UEH is required to:

• pay a financial penalty of approximately £10 million in respect of all three counts. A multiplier of 300% was applied given the offence was assessed as high culpability (as it involved the corruption of national government officials over a sustained period). The fact that UEH had made some effort to put bribery prevention measures in place was not sufficient to reduce overall culpability. A 45% discount was applied to reflect the fact that the company had self-reported and cooperated during the investigation, although the full available discount of 50% (applied where cooperation is truly “exemplary”) was not applied due to the late disclosure of Oman-related conduct in 2022. A 10% reduction also applied given the degree of overlap between the three counts; 
• pay the SFO’s reasonable costs of approximately £4.8 million; and
• provide ongoing cooperation and annual compliance reporting to the SFO during the three-year term, including information as to the operation of its processes and procedures relating to use of intermediaries and joint venture/consortia agreements.

As UEH did not profit from the Omani project and did not obtain the Algerian contracts, the DPA makes no provision for disgorgement of profits. 

Interests of Justice

Mr Justice Hilliard concluded that it was in the interests of justice to approve the DPA. In reaching that conclusion, the Court considered a number of factors including:

• the fact that the organisation had fundamentally changed and all of the management at the time, and employees involved in the conduct, were no longer with the company. The Court noted that “the organisation at the time of this DPA is effectively a different entity from the one that committed the offences, and it is operating in a completely different way and with different personnel. What has happened in the past does not taint the modern company”. The Statement of Facts notes that new owners were only provided with limited information about the SFO investigation into the Algerian projects and had no information about the issues in Oman prior to the acquisition. 
• the potential impact that prosecution could have on the company, its employees and the supply chain (i.e. collateral effects on the public). The Court noted that the DPA would “help safeguard the position of innocent employees and the public from adverse effects on the UK defence industry”, which echoes the approach taken by Sir Brian Leveson in the judgment approving the Rolls-Royce DPA in January 2017 (covered in our previous post here). The SFO noted that UEH held substantial multi-year defence contracts with the UK and other Five Eyes governments, with certain Ultra Group entities undertaking work classified as SECRET and TOP SECRET to support critical sensitive capabilities, and that prosecution could have an impact on the company’s ability to perform these contracts. Additionally, whilst section 7 of the UKBA does not trigger mandatory automatic debarment under Schedule 6 to the Procurement Act 2023, discretionary debarment remained a live risk, with potential repercussions for supply chains, impairment of competition in the defence sector at a time of heightened risk, possible loss of commercial partner confidence and possible group-wide redundancies concentrated primarily in the UK and US, where UEH employs approximately 1,500 staff. 
• the three-year term of the DPA ensures UEH’s continuing cooperation with the SFO and other UK and international law enforcement agencies, enables the cultural changes and the improved compliance programme to be fully embedded and allows the SFO to evaluate the effectiveness of ongoing processes.
• demonstration by new management of what the SFO considered to be exemplary cooperation, including facilitating interviews, identifying relevant individuals and documents, offering waivers of privilege, providing detailed reports and presentations and granting access to overseas records and legacy entities. 
• extensive remediation by UEH, including replacing senior management, appointing an experienced Chief Compliance Officer, overhauling compliance frameworks, enhancing policies and procedures, delivering extensive anti-bribery and corruption training and auditing financial controls. UEH also conducted a wholesale review of all third-party intermediaries and retained only those deemed strictly necessary. 

Commentary

This is the first SFO DPA since July 2021 and in many ways, it is consistent with previous DPAs in that it:

• emphasises the importance of self-reporting, cooperation, compliance uplift and ongoing monitoring.
• echoes some of the considerations relating to the impact of prosecution on the supply chain and the consequences of debarment we have seen in other DPAs involving companies in the defence sector. Similar to the Rolls-Royce and Airbus DPAs, the Ultra Electronics DPA shows that for companies involved in public contracting, the risk of debarment remains an important factor in the interests of justice analysis.
• reaffirms the DPA as the SFO’s preferred tool for resolving complex corporate bribery cases where companies engage constructively with an investigation. This approach aligns with the SFO’s five-year strategy, which states that the SFO needs to be more open and innovative in pursuing alternatives to formal prosecution where appropriate.
• fits into the trend of DPAs failing to translate into liability for individuals, as the SFO has indicated that it will not be charging anyone in relation to the underlying bribery. As a result, it will remain the case that only one individual has been convicted in the UK in connection with conduct subject to a DPA despite the SFO having entered into 14 DPAs since their introduction in 2014 (our post on that conviction is available here).

Separately, the case serves as a further reminder that the civil aviation and aerospace infrastructure sectors continue to present elevated bribery and corruption risk, particularly in jurisdictions where the use of local agents and joint ventures is standard commercial practice. This pattern will be familiar to those who have followed DPAs involving Rolls-Royce and Airbus, which similarly involved alleged bribery through third-party intermediaries in connection with civil aerospace contracts in multiple overseas markets. Companies operating in these sectors – and others – should treat this case as a prompt to review their anti-bribery and corruption frameworks to ensure that they are up to date and tailored to the risks that the company faces (identified through a formal risk assessment). It is noted that, although the DPA addresses failure to prevent bribery, it specifically calls out the commissioning by UEH of an independent risk assessment by an external firm regarding the new failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023, and subsequent enhancement to policies.

Notably, the DPA provides some insight into what the SFO expects by way of cooperation and where this will be rewarded with a substantial discount to the penalty, in circumstances where issues in Oman were only reported to the SFO four years after the initial self-report in relation to conduct in Algeria. The Statement of Facts and the judgment note that the SFO considered UEH’s cooperation to have been exemplary post-acquisition, though Hilliard J noted that the company’s conduct pre-acquisition could not be properly described as truly exemplary due to the late disclosure of issues in Oman. However, despite this late disclosure and the collapse of negotiations with the SFO, a difference in cooperation under old and new management and a commitment to a significant overhaul of the company’s compliance programme meant it was able to benefit from the cooperation discount. 

The DPA provides a clear message on the importance of ensuring that anti-bribery and corruption policies and procedures are up to date, adequate for the identified risks that a company faces and correctly enforced. However, in light of the initially limited disclosure and pause in negotiations, some may argue that, following refreshed SFO guidance, the case sends a somewhat mixed message on expectations of cooperation throughout an investigation. 

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