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Keppel Offshore & Marine pays S$570m to resolve Petrobras bribery probes
An oil rig manufactured by Keppel Offshore & Marine. TODAY File Photo.
December 25th, 2017 | 09:17 AM | 1322 views
Keppel Corporation’s offshore rig building business will pay more than US$422 million (S$570 million) to resolve charges it bribed Brazilian officials, including some at state-run oil company Petrobras, United States authorities said on Friday (Dec 22).
Keppel Offshore & Marine Ltd (KOM) agreed to pay the combined penalty to resolve investigations by authorities in the United States, Brazil and Singapore, the US Justice Department said.
The Singapore-listed company entered into a deferred prosecution agreement while a US subsidiary, Keppel Offshore & Marine USA Inc, pleaded guilty in federal court in Brooklyn to conspiring to violate the US Foreign Corrupt Practices Act.
The Justice Department also revealed that a former member of the company’s legal department secretly pleaded guilty in August in connection with the ongoing investigation. That person’s identity could not be immediately determined.
Keppel Corporation Chairman Lee Boon Yang said the Singapore-based company regretted the actions that took place in Brazil.
“Integrity is one of Keppel’s core values,” Mr Lee said in a statement. “We do not and will not tolerate any illegal activity in the conduct of our business.
“We regret and are deeply disappointed by the actions that we now know to have taken place at the Group’s offshore and marine business in Brazil from around 2001 to 2014.
“Global companies such as Keppel have both a legal and moral duty to operate fully within international laws and regulations. Any perception that illegal payments can be condoned, if they are made by agents, is wrong and will not be tolerated.
“Since the allegations emerged, we have moved quickly and decisively to put in place stricter controls and embedded best practices across the Group to ensure that such unacceptable behavior will not be repeated.”
Mr Loh Chin Hua, CEO of Keppel Corporation, added: “The past practices uncovered at KOM do not reflect how the Keppel Group conducts business today. Keppel does not just care about results, we care deeply about how our results are achieved.
"We have zero tolerance for corruption. Effective compliance controls are now thoroughly embedded across all our businesses supported by rigorous anti-corruption training and robust compliance and governance regimes.
"Today’s settlement means we can draw a line under this difficult issue which has been a key focus of the board and senior management since the bribery allegations first emerged, and look to the future.
"It has been a very painful chapter for Keppel and the thousands of hard working and honest colleagues we employ in Singapore and around the world. We must now work hard to win back the trust our stakeholders have placed in us and demonstrate our determination to hold ourselves to the highest ethical standards everywhere we operate.
"Given Keppel’s strong track record and capabilities, I am confident that we will emerge as a more disciplined and sustainable company, better able to pursue our growth plans.”
Petrobras has been at the centre of Brazil’s largest ever corruption scandal amid investigations into political kickback schemes involving contractors.
The Justice Department said that from 2001 to 2014, KOM engaged in a scheme to pay US$55 million in bribes to officials at Petrobras and the then-governing political party in Brazil, the Workers Party of Brazil.
The bribes were paid to win 13 contracts with Petrobras and Sete Brasil Participacoes SA, a privately-held Brazilian company that commissioned a large fleet of rigs for Petrobras’ use, according to charging documents.
KOM concealed the bribes by making payments to a consultant, who in turn facilitated the bribes by transferring money to bank accounts controlled by or for the benefit of the Brazilian officials, the charging papers said.
In total, the company earned US$351.8 million through the bribery scheme, according to court papers.
The Justice Department said KOM had agreed to pay about US$422.2 million, of which the United States would receive almost US$105.6 million.
The Justice Department said Brazil will receive more than US$211 million and Singapore will receive up to US$105.6 million. REUTERS
courtesy of TODAY
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