Did Keppel management lie to the public?

by Vincent Low

In the Brazilian bribery case involving Keppel Offshore & Marine, some US$55 million (SGD$73.5 million) were reported to have been paid by a Keppel agent to Brazilian govt officials in order to secure deals for Keppel in Brazil. These "improper payments" were made over a period from 2001 to 2014, and they were carried out with the knowledge or approval of former Keppel senior executives.

Bloomberg broke the news last year on 3 August, reporting on how the Brazilian agent, Zwi Skornicki, testified in a Brazilian court naming five of the Keppel senior executives, which include then Keppel Offshore & Marine CEO Chow Yew Yuen, who had authorized him to bribe the officials.

Keppel's management at first denies bribery involvement

When Bloomberg broke the news, Keppel's management immediately responded on the same day, denying its involvement in the bribery case.

Keppel in its public statement, stated:

"Keppel strongly denies the allegations reportedly made that Keppel executives authorised Mr Skornicki to pay bribes on its behalf. None of the individuals named in the article, including the current CEO of Keppel Offshore and Marine Mr Chow Yew Yuen, have ever authorised Mr Skornicki to make any payments as bribes."

The public statement was also made via SGXNET, where Singapore listed companies make their corporate announcements to inform the market with regard to their corporate development and activities.

Seven months later in March this year, Keppel issued a statement saying that Keppel Offshore & Marine CEO Chow Yew Yuen would "retire" with effect from 31 March 2017.

Keppel now acknowledges its bribery involvement

And last week (23 Dec 2017), Keppel issued a new statement finally acknowledging that the corrupt payments made by their agent to Brazilian officials were "made with knowledge or approval" of former senior executives of Keppel.

"As announced in October 2016, Keppel undertook a thorough internal investigation, identified certain suspicious transactions involving Mr Skornicki, and cooperated fully and extensively with the authorities to resolve the issues arising from or in connection with those transactions," Keppel said.

"The authorities recognise Keppel's cooperation in the investigations and its extensive remedial measures, which involved significant enhancements to compliance and internal controls systems across the Keppel Group, and disciplinary action against individuals involved in the misconduct."

Dr Lee Boon Yang, Keppel Chairman, apologized, "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."

He assured the public that "such unacceptable behavior will not be repeated" in Keppel.

Dr Lee was a former minister and member of parliament from the People's Action Party who had been appointed as the chairman of the board of Keppel Corporation since 2009.

Mr Loh Chin Hua, CEO of Keppel Corp which is the parent company of Keppel Offshore & Marine, added, "We have zero tolerance for corruption... 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."

Both Dr Lee's and Mr Loh's names did not appear among the five names mentioned by the agent in the Brazilian court.

In any case, it appears that the statement made by Keppel's management on 3 Aug 2016 that they didn't authorize its agent to make bribery payments, was false.