SINGAPORE (July 8): Sembcorp Marine (SembMarine) has lodged a suspicious transaction report linked to ex-employee Martin Cheah Kok Choon with the Commercial Affairs Department of the Singapore Police Force.

The suspicious transaction is linked to Cheah when he was president of SembMarine’s Brazilian subsidiary, Estaleiro Jurong Aracruz (EJA) until June 2015 when his employment was terminated.

SembMarine said the transaction came to light as part of the ongoing investigations of Operation Car Wash, the codename for the corruption probe into Petrobras, Brazil’s national oil company, in which other companies paid officials at the oil producer to win business.

See: Police raid a reminder that Sembcorp Marine's Brazil woes are far from over

As announced by SembMarine on July 3, the Brazilian authorities executed a search warrant on the premises of EJA in connection under Operation Car Wash and against Guilherme Esteves de Jesus (GDJ), a former consultant of EJA who has been arrested by the Brazilian Federal Police.

SembMarine said it had co-operated fully with the Brazilian Federal Police and provided materials within the scope of the warrant. The company also learnt that the investigations which led to the execution of the search warrant on EJA had been expanded to include Cheah.

Other than Cheah, SembMarine said it is not aware of any other director or management of the company is being involved in the said investigations.

In a recap, SembMarine said its subsidiaries had secured a number of drill rig construction contracts with the subsidiaries of Sete Brasil back in 2012. Companies connected to GDJ were engaged by the company’s subsidiaries as consultants in Brazil.

In February 2015, the media reported Pedro Jose Barusco (PJB), Petrobras’ former engineering manager, alleging illegal payments had been made in connection with contracts entered into by Petrobras and Sete Brasil.

Following the reports, SembMarine said it set up a special committee and appointed legal counsels from Singapore and Brazil to conduct internal investigations and to advise the company.

On March 30, 2015, SembMarine announced it had received a copy of a plea bargain entered into between PJB and the Brazilian authorities, in which PJB made allegations against GDJ in connection with the contracts, and that GDJ was arrested by the Brazilian authorities in late March 2015.

In April 2017, GDJ was charged by the Brazilian authorities. His trial started in 2018 and he has defended the charges. “These criminal proceedings against GDJ have not been concluded and the company has been monitoring, and continues to monitor, such proceedings,” says SembMarine.

“All contracts for consultancy services provided to the company’s subsidiaries by companies connected to GDJ were suspended and remain suspended. The group has not had any dealings with GDJ or the companies connected to GDJ following such suspension,” adds SembMarine.

Operation Car Wash -- the investigation into one of South America’s biggest corruption scandals -- has involved leading politicians, construction companies, banks, and shipyards -- including the offshore & marine division of Keppel Corp.

In 2017, Keppel Offshore & Marine USA pleaded guilty, while its parent, Keppel Offshore & Marine, entered into a deferred-prosecution agreement with the government and paid fines totalling US$422 million.

Zwi Skornicki, a former agent of a US unit of Keppel Offshore & Marine, recently also pleaded guilty to paying bribes to Brazilian officials.

See: Ex-Keppel agent admits guilt in US in Petrobras bribe scam