SINGAPORE (July 8): Singapore’s formerly thriving offshore oil and gas sector has received yet another rude jolt: The fallout from the multi-year bribery-for-contracts scandal in Brazil is not over.

In a pre-market announcement on July 3, Sembcorp Marine said the Brazilian federal police had conducted a search of the premises of its subsidiary Estaleiro Jurong Aracruz (EJA) in Brazil. Investors were spooked. SembMarine shares crashed from $1.54 to $1.41 on July 3, before recovering to close a cent higher at $1.42 on July 4. Some $250 million in market value was destroyed in these two days.

According to SembMarine’s announcement, the raid by the Brazilian police, the date of which has not been specified, was in relation to on-going investigations against EJA’s former consultant, Guilherme Esteves de Jesus. He was arrested on March 27, 2015. The announcement also named, for the first time, a SembMarine executive as part of the probe: Martin Cheah Kok Choon, former president of EJA.

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