SINGAPORE (Feb 5): It has been six weeks since Keppel Corp said its offshore and marine (O&M) unit had reached a global resolution with the authorities in the US, Brazil and Singapore in connection with a bribery scandal that will see it paying out fines topping US$422 million ($553.7 million). Including legal, accounting and forensic costs, the whole episode resulted in a charge of $619 million in 4Q2017, which led to a loss of $495 million — the group’s first ever quarterly loss.

Yet, an investor who bought shares in Keppel the day before the fine was announced would be sitting on a gain of more than 19% at the stock’s Feb 1 closing price of $8.70. Keppel’s market value in that period swelled nearly $3 billion — about five times the $619 million charge it took in 4Q2017.

That raises some uncomfortable questions: Was Keppel’s involvement in the now widely reported 13-year-long bribes-for-contracts scandal in Brazil actually worth it? Was the financial penalty a sufficient deterrent? Or, should the authorities have considered other measures, such as barring Keppel’s O&M unit from taking on new business in certain markets for a period of time?

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