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CALGARY - Griffiths Energy has agreed to pay $10.35 million in fines for bribing the wife of a Chadian diplomat in the hopes it would smooth the way for the privately held company to do business in the African country.

Problematic consulting contracts were signed between Aug. 30, 2009 and Feb. 9, 2011 — five months before an all-new management team took control of the company.

"What is truly extraordinary about this case is that the new leadership team at Griffiths energy were the ones to detect and correct the wrongdoing long before anybody else would have been the wiser," Griffiths lawyer Kristine Robidoux told a Calgary court on Tuesday.

"They are essentially serving as whistleblowers on their own company."

She called the situation a "tale of two companies."

Robidoux said the fine — $9 million plus a 15 per cent victim fine surcharge — is "not trifling."

"The new management and board of this company unequivocally condemns the behaviours described to the court this morning," Robidoux told a Calgary courtroom.

"They agree that the offence was serious and they agree that the penalty must achieve the sentencing objective of denunciation and deterrence."

A judge's decision on approving the fine agreement reached between Griffiths and the Crown is scheduled for Friday.

Griffiths disclosed last week that it had been charged under a Canadian law called the Corruption of Foreign Public Officials Act.

In June, 2011, Niko Resources (TSX:NKO), a much larger Calgary company, was fined $9.5 million for offences under the act in relation to bribes to Bangladeshi officials.

There is no indication that the bribes — $2 million in cash, plus some Griffiths stock — actually led to any advantage for Griffiths.

"Despite that fact, the company does acknowledge that its former management made those attempts to secure that influence and that satisfies the constituent elements of the offence," said Robidoux.

Griffiths was incorporated in August 2009 by Bay Street financier Brad Griffiths and brothers Naeem and Parvez Tyab.

According to the agreed statement of facts, around that time a "consulting agreement" was signed by Naeem Tyab, on behalf of Griffiths, and a company owned by the Chadian ambassador, based in Washington.

The services covered in the contract were described as "advisory, logistics, operational and other assistance" regarding Griffith's energy projects in Chad.

A $2-million fee was to be payable to the ambassador's company if Griffiths was awarded two exploration blocks by a certain date, the statement of fact said.

The following month, lawyers advised Naeem Tyab that he shouldn't make that offer to a government official and the agreement was terminated. But another agreement with identical terms was signed between Griffiths and a different company owned by the ambassador's wife, court heard.

Members of the current management team discovered the suspect contracts as they were doing preparations for a public offering of stock around late October and early November 2011.

Almost immediately, they launched an internal investigation, the results of which were handed over the Canadian and U.S. authorities.

The IPO has since been called off, causing Griffiths to write off $1.8 million in costs. The cost of the internal investigation is estimated to be $5 million.

The RCMP investigation into the matter is still ongoing, said the Crown's Robert Sigurdson.

Griffiths, the company's chairman and co-founder, died in a boating accident in Ontario's cottage country in July 2011. It happened that the groundwork had already been laid for a new management team to step in around that time.

News from © The Canadian Press, 2013