Photo from project webpage of Keppel FELS Brasil

Former Keppel Offshore & Marine CEO named in Brazilian court was also named in UK bribery case in SG court

by Vincent Low

Last week, news broke that Keppel Offshore & Marine was involved in a mega bribery case in Brazil. The whistleblower is a Brazilian, Mr Skornicki, working for Keppel as its agent. Keppel at first issued public statements to deny everything but later acknowledged that “certain transactions associated with Mr. Skornicki may be suspicious”.Finally, US and Brazilian authorities found that some US$55 million may have been paid by the agent to Brazilian govt officials in order for Keppel to secure deals 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. Some of these illicit money was channeled through bank accounts in US.

Mr Skornicki had earlier named 5 senior Keppel executives in a Brazilian court, allegedly involved in the bribery scandal. And among the 5 named is former Keppel Offshore & Marine CEO Tong Chong Heong.

Tong served 40 years in Keppel and a PBM holder

Tong was the CEO of Keppel Offshore & Marine from Jan 2009 to Feb 2014 before “retiring” from Keppel. He was also an Executive Director of Keppel Corp from 2009 to 2011 and its Senior Executive Director from 2011 to 2014.

Tong was honoured with the Singapore Public Service Medal at the 1999 National Day Award as well as the Medal of Commendation (Gold) Award at NTUC May Day 2010. Currently, he is a Director of ITE Education Services Pte Ltd, a Board Trustee of the NTUC-U Care Fund and an Advisor to the Singapore Institute of International Affairs. In addition, he is a Board Director of SIA Engineering.

Keppel bribed Exxon employee in UK to get ship repair contracts

In Jun 1995, Keppel was cited in a UK probe into a bribery scandal involving an Exxon subsidiary’s employee. The person, Cornelius Van der Horst, who handles ship repair contracts at Exxon’s Southampton-based subsidiary, was charged with accepting bribes from Keppel shipyard.

As a result, on Singapore’s end, then Home Affairs Minister Wong Kan Seng also announced in Aug 1995 that CPIB had initiated investigation into the bribery case involving Keppel shipyard and a British employee of oil giant Exxon.

By Jul 1996, with no news of the investigation, an opposition Member of Parliament from Singapore Democratic Party, Ling How Doong filed questions in Parliament asking about the matter. Then Prime Minister Goh Chok Tong replied that the CPIB was still working on the Exxon bribery case. The bribery scandal was said to have involved millions of dollars.

Tong named in SG court in 1997 over UK bribery case

Finally, the case was brought to Singapore court and Keppel pleaded guilty in Dec 1997 for giving $8.53 million in bribes to the Exxon employee. This is for the purpose of helping Keppel to secure ship repairing contracts from the Exxon’s subsidiary. The Exxon employee had already been sentenced to 3 years’ jail in Jan 1996.

In court, it was revealed that Keppel’s marketing manager Chan Lim Hong had visited Van der Horst before to find out why Keppel was not successful in winning the ship repair tenders from the Exxon’s subsidiary. Chan was told that Keppel’s price was too high.

Later, Chan brought its Senior General Manager, Kung Yew Hock, to see Van der Horst and to entertain him at Club Kabuki in Orchard Road. Kung reportedly told Van der Horst, “If that side takes care of you, we can also take care of you.”

Subsequently, the Exxon subsidiary awarded a contract to Keppel to repair a tanker. After the job was completed and the bill was passed on to Van der Horst, he wanted his “cut” which he was promised earlier. Chan passed this message to Kung, who, according to ST report, “discussed this with other Keppel directors”, and one of them was Tong.

ST reported that the directors then “decided to give Van der Horst a cut of 1 per cent of the contract sum for all tenders” awarded to Keppel by the Exxon’s subsidiary. Van der Horst’s cut was wired to his Citibank account in Singapore.

Once Van der Horst started receiving payments from Keppel, he would give information about its competitors’ tenders, including the price and deadline to complete a job, to Keppel. Thereafter, Keppel had been successful in winning nearly all the ship repair tenders from the Exxon’s subsidiary.

The court fined Keppel $300,000 for the Exxon bribery case. No Keppel personnel was charged.

Tong moved out of Keppel Shipyard to Australia after Exxon employee jailed

It’s interesting to note that after the Exxon employee who received Keppel’s bribes was sentenced to 3 years’ jail in UK in Jan 1996, Keppel moved Tong out from Keppel shipyard to Keppel Cairncross Shipyard in Brisbane the next month.

Then Managing Director of Keppel Corp said, “Keppel has the practice of rotating its senior executives between various positions within the group.”

“Overseas stints provide our senior executives the opportunity to broaden their perspectives and outlook,” he added. (source)

In any case, Tong made millions in salary working for Keppel. For example, according to Keppel’s annual report, when Tong was the CEO of Keppel Offshore & Marine in 2009, his remuneration was nearly $7 million. He was the third highest paid director in Keppel then.

No doubt, Keppel does take very good care of its people.