Unknown if CPIB and AGC investigated links between KOM’s senior staff in Singapore and the bribery scheme committed in Brazil

Unknown if CPIB and AGC investigated links between KOM’s senior staff in Singapore and the bribery scheme committed in Brazil

SINGAPORE — It is unknown if Corrupt Practices Investigation Bureau (CPIB) or Attorney-General’s Chambers (AGC) have investigated possible links to corruption case by the former senior management Keppel Offshore & Marine (KOM) with those who are based in Singapore.

CPIB issued a press statement on Thursday (12 Jan) about its stern warnings to six former senior executives of KOM after close to five years of its investigations into offences punishable under the Prevention of Corruption Act (PCA). The decision to stern warnings in lieu of charges being filed was made in consultation with AGC.

Back in 2018, Members of Parliament from the Workers’ Party (WP) filed Parliamentary Questions over the bribery scheme committed by KOM soon after CPIB and AGC served a conditional warning to KOM on 23 December 2017 for corruption offences punishable under Section 5(b)(i) of the PCA.

Among the many questions filed by WP MPs, MP for Aljunied GRC, Mr Pritam Singh and former MP for Hougang SMC, Mr Png Eng Huat asked when the Government expects the CPIB and AGC to formally complete investigations and to charge the individuals in question in view of the criminal findings made against KOM by the US DoJ.

Answering on behalf of the Minister for Law, K Shanmugam, Ms Indranee Rajah said that AGC needs evidence from foreign jurisdictions, it has sought assistance, and it is continuing to work with foreign authorities.

“AGC has asked for certain information from foreign authorities and some of its requests are still pending. AGC anticipates that further requests will have to be made as the investigations develop. Only after the investigations are completed can the AGC properly assess the case and decide on the appropriate response. This is something for the Public Prosecutor to decide, independently.”

She added, “How the Public Prosecutor decides will depend on several factors, including the culpability of each individual, the available evidence and what is appropriate in the circumstances.”

“For example, it will be important to determine, for each individual: what he knew, the extent of his involvement, his motivations, any personal benefit he obtained, the circumstances under which the relevant acts took place and any cooperation rendered.”

When Mr Png asked if Ms Indranee could clarify whether bonuses and salary increases given to senior staff past and present for meeting profit and revenue targets, were deemed as personal benefits in light of her answer, Ms Indranee said how the Public Prosecutor decides to prosecute will depend not just one factor but several.

“It includes the culpability of each individual, the available evidence, what is appropriate in the circumstances, the knowledge of each individual, the extent of his involvement, his motivations, any personal benefits he obtained, the circumstances under which relevant acts took place and any cooperation rendered.” said the Senior Minister of State.

While Ms Indranee noted in her response to the WP MPs that KOM was given maximum credit for its full cooperation with investigations, it bears noting that the plea agreement noted that KOM did not voluntarily disclose its conduct to the Fraud Section.

Although KOM notified the Fraud Section about publicly-reported allegations in Brazil prior to being contacted, as the authorities were already aware of the allegations from news reports, KOM was not eligible for voluntary disclosure credit. KOM had also publicly denied the allegation of its offence when news of it first surfaced.

No answer from Govt as to whether Board of Keppel will or have been investigated

In a supplementary question, Mr Singh had asked if the CPIB or the Public Prosecutor would look into whether the Board of KOM had oversight over the contract, such as whether the board members had knowledge or they were involved in that contract and the nature of their oversight and their culpability in the bribery scheme.

Ms Indranee said, “That is actually not so much a question for the Government. As to what is known and not known within the Keppel group, that is, really, a Keppel matter.”

“The only thing that I can do here which would be useful is to point Mr Singh to one of Keppel’s media releases, where Keppel said that the current boards of directors of Keppel Corporation and its unit KOM were not aware of the illegal payments made to secure projects in Brazil. That is Keppel’s position. As far as the Government is concerned, as I have explained, the Government is shareholder in Temasek, Temasek has a just over 20% shareholding in Keppel Corporation and the operations of Keppel are run by Keppel itself.”

Mr Png also asked if Ms Indranee could clarify whether the email trail leads back to senior staff in Singapore.

He said, “In the investigation of the scam, did the email trail lead back to Singapore, which means were senior staff in Singapore actually orchestrating or sanctioning all these from Singapore?”

Email exchanges between the six executives were detailed in the plea agreement signed by KOM where they conspired to bribe the Brazilian officials to win contracts for the company.

Ms Indranee responded by saying, “All these are matters which are subject to investigation. I do not have this information and it certainly would not be appropriate for me to enquire on this point. This is something which the Public Prosecutor and the CPIB are looking into. Let them deal with it. Let proper process, due process take place and in time, they will have to make the appropriate decision.”

In a separate supplementary question, Mr Png asked:

Would the Senior Minister of State not agree with me that the money earned by KOM through illegal and corrupt means are highly improper, and would the Senior Minister of State not agree that the dividends paid out by KOM who knew very well that its earnings were derived from bribing people and political party in power would also be deemed illegal, and would then need to be clawed back from members of senior staff, Board of Directors past and present, and the only way to ascertain the amount is through a forensic audit? Would the Government be ordering one?

Mr Png further asked if there would be a claw back illegal payouts and, thus, whether the Government would order a forensic audit since this is one of the biggest corruption scandals in corporate Singapore.

In response, Ms Indranee said, “As I have said, US$422 million is going to be paid out by the company. That is by the company. Insofar as the individuals are concerned, I have already pointed to the fact that in the DPA (deferred prosecution agreement), it has been disclosed that the company has gone against the individuals. So, basically, as far as any monies that should not have been obtained, were obtained, they have actually, effectively, been disgorged.”

No follow-up question was allowed as the Deputy Speaker, Christopher de Souza, ended the question time for the topic.

Given that CPIB has ended its investigation with the six executives with stern warnings issued, there will be no cross-examination of the suspects or revealing of investigation results in open court.

Therefore, the public will probably never know whether there were links between the senior staff in Singapore and the bribery scheme in Brazil committed over the span of over a decade or whether CPIB had even conducted an investigation upon these senior staff, to begin with.

What would be certain is that opposition MPs would file follow-up questions on the matter in the next Parliament sitting since investigations have concluded.

However, the worry that lingers is whether Ms Indranee — who is most likely answering the question — will say that the answer is not helpful or meaningful to be provided.

Offences the stern warnings were issued for

The offences relate to bribe payments to officials of Brazilian state-owned corporation Petróleo Brasileiro S.A. (Petrobras), pertaining to rigs-building contracts which Petrobras and/or its related companies had awarded to KOM.

According to the admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate United States’ 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.

KOM, which has Temasek Holdings as a significant shareholder, effectuated and concealed the bribe payments by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party.  KOM USA participated in this conspiracy from approximately 2007 to 2014.

KOM and its related entities, including KOM USA, are said to have earned profits totalling approximately US$159.9 million from the P-61 project.

KOM signed a plea agreement document with the United States Department of Justice (DoJ), admitting to the offence and paid a total fine of US$422 million to avoid further actions against the company.

Six former executives from KOM were arrested by CPIB in Feb 2018 following the DoJ’s investigation. The six were subsequently let off on bail, and the matter was then referred to the AGC to decide if charges were to be filed.

CPIB, in its latest press statement, said that the case is complex and transnational, involving multiple authorities and witnesses from several countries.

“There are evidentiary difficulties in cases of such nature. Many of the documents are located in different jurisdictions. In addition, key witnesses are located outside of Singapore and cannot be compelled to give evidence here. 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,” said CPIB.

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