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Keppel Offshore & Marine to pay over $422m in fines to settle Brazilian bribery case

Keppel Offshore & Marine to pay over $422m in fines to settle Brazilian bribery case
Keppel Offshore & Marine (Keppel O&M) is to pay $422m in fines to settle bribery and corruption cases in Brazil.

Keppel O&M has agreed to pay over $422m in the Brazil, the US and Singapore, to resolve charges related to a decade-long scheme under which millions of dollars in bribes were paid by its former Brazilian agent Zwi Skornicki.

Keppel O&M has accepted a conditional warning from the Corrupt Practices Investigation Bureau (CPIB) in Singapore, and entered into a Deferred Prosecution Agreement (DPA) with the US Department of Justice (DOJ), while Keppel FELS Brasil, has reached a Leniency Agreement with the Public Prosecutor's Office in Brazil, the Ministério Público Federal (MPF).

The US Department of Justice said that court documents showed that between 2001 and 2014 Keppel paid approximately $55m in bribes to officials from Petrobras and the then governing party of Brazil in order to win 13 contracts with Petrobras and another Brazilian entity, Sete Brasil. It said Keppel hid the payments by paying outsized commissions to an intermediary.

Under the agreements Keppel O&M is to pay $211.1m to Brazil and $105.5m each to Singapore and the US, the latter includes a $4.275m criminal fine.

An unnamed former senior member of Keppel O&M's legal team has plead guilty to a charge in the US.

“These agreements relate to corrupt payments made by Mr Skornicki in relation to several KOM projects in Brazil, which were made with knowledge or approval of former Keppel O&M executives,” Keppel said. 

US court documents cited six unnamed executives of Keppel and three Brazilian officials. “For legal reasons, Keppel is unable to comment on the agreed Statements of Facts released by the investigating authorities or on the identities of individual employees,” Keppel said.

Keppel received credit for its cooperation into investigations in the bribery claims, and disciplinary action taken against the individuals involved, and the criminal penalty was reduced by 25% as result.

“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,” said Lee Boon Yang, chairman of Keppel Corp, parent of Keppel O&M.

“Since the allegations emerged, we have moved quickly and decisively to put in place stricter controls and embedded best practices across the group to ensure that such unacceptable behavior will not be repeated."

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