View from City Road: A gift for getting into trouble

What's a little corruption, when it's abroad? You can hardly get through the airport in some countries without slipping something to a minor official. This widely shared prejudice that they're all at it in the East probably helped Standard Chartered's share price weather the storm over market rigging at its Hong Kong securities arm.

Much the same applies to the latest revelations about mysterious expenses payments by executives of Mocatta, the bullion-dealing subsidiary, which have knocked no more than a penny off its share price. Coincidentally, IBCA, the rating agency, yesterday raised Standard's credit rating.

Even the Bombay securities scandal two years ago, which cost Standard a lot of money, caused only a brief hiccup in the meteoric rise of the shares.

But times have changed. When Standard was run as a collection of unruly baronies in distant countries squabbling with each other and head office, it was natural that dubious 'local business practices' prevailed and were accepted.

Under Malcolm Williamson, the chief executive, the bank has been knocking heads together and imposing a common code of conduct on a far-flung empire.

The code says: 'You may not solicit or accept from, or offer to, an existing or prospective customer, counterparty, supplier or contractor of a group company any favour, gift, entertainment or other benefit the size or frequency of which exceeds normal business contact. Nothing may be given or received which might distort commercial judgement or harm the group's reputation.'

It adds that only normal business entertainment and 'non-monetary gifts of insignificant value' are acceptable.

Whether the bank can police the code effectively in some of the countries it operates in is an interesting question to which the answer will only slowly emerge.

The code nevertheless makes commercial as well as ethical sense, since an increasing number of places, including Hong Kong, have been vigorously cleaning up their own markets.

And while a bribe might secure a profitable deal it can also draw a company into a network of corruption that might one day have extremely expensive consequences.