SBM Offshore May Have Broken Anti-corruption Laws
Oil services company SBM Offshore NV said Wednesday it could face penalties and criminal prosecution by Dutch and U.S. authorities should an ongoing investigation show that it has violated anti-corruption laws.
-In a prospectus for a rights offering, SBM Offshore said it may have violated anti-corruption laws, which, if true, could harm its reputation, reduce its revenue and profit, and result in monetary penalties, criminal and civil sanctions and other remedies.
-SBM Offshore said, through an investigation, indications have surfaced that the Company has paid substantial sums, mostly through intermediaries, which appear to have been intended for governmental officials.
-The Company voluntarily disclosed the investigation to the Dutch Public Prosecution Service (Openbaar Ministerie) (OM) and the United States Department of Justice (DoJ) in 2012. The Company agreed to periodically update the OM and the DoJ regarding the investigation.
-The Company is unable to estimate the ultimate consequences, financial and otherwise, if any, of the payments which led to this investigation at this time.
-Further, violations of law or compliance procedures may have occurred in the same or other jurisdictions, in which the Company's management may have been involved.
-Failure to comply with anti-corruption laws could give rise to criminal prosecution by the OM, the DoJ or any local authorities, civil claims or administrative proceedings against the Company.
-This could result in the Company paying damages or significant fines or penalties imposed by the OM, the DoJ or any local authorities, as well as disgorgements, debarment or other remedies.
-Under US anti-corruption laws, the maximum fine is calculated under a multi-step process set out in the advisory "Federal Sentencing Guidelines"and could have a material financial impact on the Company.
-The Company may also have to divert significant management time and effort away from the business to these proceedings. In addition, and regardless of the outcome of any claims, prosecutions or proceedings, the Company could suffer reputational damage and loss of business.
-The investigation, which is carried out by outside legal council and forensic accountants, is expected to be completed in 2013. The timing of completion depends in part on further discussions with authorities.