Keppel Offshore & Marine (Keppel O&M), which was involved in a corruption scandal in Brazil, has yet to conclude its penalty discussions with the Public Prosecutor’s Office in Brazil, Ministério Público Federal.
This is despite Keppel O&M’s compliance with its obligations under the Leniency Agreement with the Brazilian authorities, according to a Dec 23 filing.
In 2016, Keppel O&M, a subsidiary of Keppel Corp, was embroiled in corrupt payments made by its former agent in Brazil.
Under a global resolution with the criminal authorities in the United States, Brazil and Singapore, Keppel O&M had to comply with several obligations, including fines.
As part of the applicable fines, Keppel O&M was compelled to pay US$52.8 million ($70.5 million) – less any penalties that it may pay to the Brazilian authorities – to Singapore’s Corrupt Practices Investigation Bureau (CPIB).
The applicable fines were payable within three years from the date of the conditional warning and has been included in accrued expenses since FY2017, says Keppel.
“The discussions with the specified Brazilian authorities remain ongoing, and CPIB has agreed to extend this three-year period for a further 12 months until [Dec 22,] 2021,” Keppel says.
Meanwhile, Keppel notes that Keppel O&M has successfully complied and concluded with its obligations under the Deferred Prosecution Agreement (DPA) entered with the US Department of Justice (DOJ) on Dec 22.
Under the DPA, the DOJ agreed not to take further action against Keppel O&M in connection to the bribery scheme.
This was subject to Keppel O&M’s payment of the applicable fines and completion of a three-year period of reporting, compliance and other obligations.
Keppel says it has continued its remediation efforts and implemented significant compliance enhancements across its businesses.
The company notes that Keppel O&M had last year achieved a global certification for the ISO 37001 Anti-Bribery Management System.
The company adds that it is progressively implementing the same standard throughout the group.
“Keppel has zero tolerance for corruption. Since the allegations first emerged, we have put in place stricter controls and embedded best practices across the group,” says Lee Boon Yang, chairman of Keppel Corp.
As at 10.45 am, Keppel was flat at $5.30 with 811,400 shares changed hands.