Keppel O&M to Pay USD 422 Mn in Fines to Resolve Bribery Case
Keppel Offshore & Marine (KOM) has agreed to pay a penalty of more than USD 422 million to resolve bribery charges with authorities in the United States, Brazil and Singapore.
This brings closure to the investigations into one decade-long corrupt payments made by a former agent of KOM in Brazil.
“These agreements relate to corrupt payments made by Mr Skornicki in relation to several KOM projects in Brazil, which were made with knowledge or approval of former KOM executives,” Keppel Corporation said in a statement.
As part of the global resolution, KOM has accepted a conditional warning from the Corrupt Practices Investigation Bureau (CPIB) in Singapore and entered into a deferred prosecution agreement (DPA) with the US Department of Justice (DOJ).
Furthermore, Keppel FELS Brasil, a subsidiary of KOM, has reached a leniency agreement with the Public Prosecutor’s Office in Brazil, the Ministério Público Federal (MPF).
In addition, Keppel Offshore and Marine USA (KOM USA), also a subsidiary of KOM, has pleaded guilty pursuant to a plea agreement with the DOJ.
“The resolutions with KOM and its US subsidiary are the result of a multinational effort to investigate and prosecute a corruption scheme that resulted in the payment by the defendant companies of over USD 50 million in bribes to Brazilian officials and in profits for the defendant companies of over USD 350 million from business corruptly obtained in Brazil,” Bridget Rohde, Acting US Attorney, explained.
“In an attempt to conceal their crimes, the defendants used the global financial system – including the United States banking system – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies,” Rohde added.
Investigations revealed that “KOM made corrupt payments to officials of Brazilian state-run oil company, Petroleo Brasileiro S.A. (Petrobras), and other parties, in order to win contracts with Petrobras and/or its related companies,” The Attorney-General’s Chambers (AGC) and CPIB said in a joint statement issued on December 23.
“KOM concealed these corrupt payments by paying commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of officials of Petrobras and other parties,” AGC and CPIB further said.
DOJ also unsealed charges against a former senior member of KOM’s legal department who pleaded guilty to one count of conspiracy to violate the US Foreign Corrupt Practices Act (FCPA) in August. He is awaiting sentencing.
In reaching the resolutions with the authorities, KOM received credit for its cooperation and for taking remedial measures. Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable US Sentencing Guidelines fine range.
“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,” Lee Boon Yang, Chairman of Keppel Corporation, commented.
“Since the allegations emerged, we have moved … to put in place stricter controls and embedded best practices across the group to ensure that such unacceptable behavior will not be repeated,” Yang pointed out.