The inquiry by independent lawyers Herbert Smith reporting to the Weir chairman Sir Robert Smith, continues and further details are likely to be few.
Smith and his chief executive, Mark Selway, are understood to be furious at the payments, which were made by an agent in Dubai in 2000, and have pledged to take action to restore Weir’s reputation in the region and in the market.
Smith has already reported details to SSE, the Perth-based utility where he is set to become chairman, and is believed to have acted to ensure that such irregular payments do not recur. Neither Smith nor Selway were directors at the time of the transactions.
Weir is one of dozens of firms accused of making illicit payments additional to normal commission while taking part in the former United Nations oil-for-food programme for Iraq. The UN-approved Weir inquiry is investigating £4.2m of payments in 15 out of 37 contracts handled by a local agent in Dubai.
Weir had denied that it had been named. but has apologised for the denial. An Arbuthnot report said it was “disappointing that the situation was not identified by Weir at an earlier stage”. It said the £4.2m uplift was in the context of £55m of contracts which “appear not to have been scrutinised outside the immediate operating company.”
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John Dean, of Bridgewell Securities, said that the inquiry and the threat of industrial action at Weir Pumps in Glasgow would not affect the market view. Analysts are looking for a stronger order book, and pre-tax profits of £24m, up on £23.6m.