SINGAPORE — Six former senior management staff members of Keppel Offshore & Marine (KOM) has received stern warnings from the Corrupt Practices Investigation Bureau (CPIB) over a corruption case involving Brazilian oil giant Petróleo Brasileiro S.A. (Petrobras).
In a statement on Thursday, CPIB said they has completed its investigations, and in consultation with the Attorney-General’s Chambers (AGC), stern warnings were issued yesterday to six individuals who were formerly senior management staff of KOM.
The warnings were in lieu of prosecution for offences punishable under the Prevention of Corruption Act.
The offences relate to bribe payments to officials of Petrobras, pertaining to rigs-building contracts which Petrobras and/or its related companies had awarded to KOM.
“Under the global resolution led by the Department of Justice of the United States of America and involving Brazil and Singapore, a conditional warning in lieu of prosecution was issued to KOM for offences punishable under the PCA. ”
CPIB said it had conducted investigations into the six individuals who had allegedly conspired with each other to give bribe payments totalling about US$55 million to foreign consultants involved in KOM’s business interests in Brazil.
“These consultants then used these monies to pay bribes to Petrobras officials.”
CPIB said the case is “complex and transnational”
CPIB added that the case is “complex and transnational”, involving multiple authorities and witnesses from several countries.
The enforcement body explained that the decision whether to prosecute the six individuals for criminal offences has to “take into consideration all relevant factors”, such as “the culpability of each individual”, the available evidence and what is appropriate in the circumstances.
“Having taken these into consideration, stern warnings were issued to the six individuals,” CPIB said.
KOM, Keppel’s subsidiary which is largely owned by Temasek, involved in Brazil’s corruption scandal
KOM is a subsidiary of Keppel Corporation which is largely owned by Temasek Holdings, a Singapore sovereign wealth fund.
In December 2017, Keppel agreed to pay fines amounting to US$422.2 million as part of a global resolution with the authorities in the United States (US), Brazil and Singapore.
On 22 December 2018, US Department of Justice (DOJ) revealed that between 2001 and 2014, Keppel O&M “conspired to violate the Foreign Corrupt Practices Act (FCPA) by paying approximately US$55 million in bribes to officials at the Brazilian state-owned oil company Petrobras and to the then governing political party in Brazil, in order to win 13 contracts with Petrobras and another Brazilian entity.”
The bribery scandal was said to be Brazil’s massive corruption scandal, which involved politicians and bring down Brazil’s President Dilma Rousseff. The case had also led to mass protests in 2015.
US court documents also revealed that between 2001 and 2011, Keppel O&M executives created and executed agreements on behalf of the company with consulting firms controlled by a consultant.
The document did not mention the name of the consultant, but it is believed to be Mr Skornicki. Keppel’s former third-party agent in Brazil, who had established a consultancy called Eagle do Brasil in the early 1990s.
The Straits Times reported that he was first engaged by Keppel Fels – Keppel Corp’s subsidiary – to work as its agent.
He was arrested by the Brazillian authorities in February 2016.
In July 2016, Mr Skornicki told a judge that five leading executives, including Keppel O&M chief executive officer Chow Yew Yuen, had authorized him to bribe public officials in exchange for Petrobras contracts, as reported by Bloomberg.
Denied allegation in 2016, Keppel later admitted that “certain transactions” were “suspicious”
Keppel had “strongly” denied the allegations then, stressing that none of the executives and CEO Chow ever authorized any bribes.
But two months later the company admitted that “certain transactions” associated with Mr Skornicki “may be suspicious” and notified the authorities in the relevant jurisdictions.
The court paper stated that Keppel executives and executive of its unit in Brazil authorised the consultant during several phone calls to pay 1 per cent of the contract value as bribes in response to a demand from a Brazilian official.
Accordingly, the consultant paid about US$14.4 million in bribes to the Brazilian official and other related parties.
US court documents also revealed that Jeffery Chow, a former lawyer at Keppel Corp’s oil rig building business, had pleaded guilty to conspiring to violate the FCPA during a plea hearing in New York on 29 August 2017.
Mr Chow said that he drafted contracts with a Keppel agent in Brazil who he realized was being overpaid by millions of dollars so he could bribe Brazillian officials.
Keppel O&M earned a total of US$351.8 million through the bribery scheme.
