Keppel Resolves Bribery Case Globally

Keppel
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By MarEx 2017-12-23 15:36:36

Keppel Corporation has reached a global resolution with criminal authorities in the United States, Brazil and Singapore in relation to corrupt payments made by Keppel Offshore and Marine's (KOM) former agent in Brazil, Zwi Skornicki.

The resolution relates to corrupt payments made by Skornicki in relation to several KOM projects in Brazil, which were made with knowledge or approval of former KOM executives. As announced in October 2016, Keppel undertook a thorough internal investigation, identified certain suspicious transactions involving Skornicki and cooperated with authorities to resolve the issues.

As part of the resolution, KOM will pay fines of $422,216,980 to be allocated between the U.S., Brazil, and Singapore.

As part of the global resolution, KOM has accepted a conditional warning from the Corrupt Practices Investigation Bureau in Singapore and entered into a Deferred Prosecution Agreement with the U.S. Department of Justice. Keppel FELS Brasil, a wholly-owned subsidiary of KOM, has reached a Leniency Agreement with the Public Prosecutor's Office in Brazil, the Ministério Público Federal. In addition, Keppel Offshore and Marine USA (KOM USA), also a wholly owned subsidiary of KOM, has agreed to plead guilty pursuant to a plea agreement with the Department of Justice.

The resolution, involving three jurisdictions, is unprecedented for a Singapore company.

The authorities recognized Keppel's cooperation in the investigations, its remedial measures and disciplinary action against individuals involved in the misconduct. In light of these efforts, it was determined that an independent compliance monitor was not necessary, and KOM received a 25 percent reduction, the maximum cooperation and remediation credit possible, off the bottom of the applicable fine range under the U.S. Sentencing Guidelines.

Dr Lee Boon Yang, Chairman of Keppel Corporation, said, "Integrity is one of Keppel's core values. 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.”

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."