A court in Brazil has accepted charges filed against two men formerly linked to Sembcorp Marine's wholly owned Brazilian subsidiary, the mainboard-listed firm said yesterday.

The Federal Justice Court of Curitiba accepted the complaint offered by the Federal Public Ministry against Guilherme Esteves de Jesus for money laundering, and against Martin Cheah Kok Choon for money laundering and corruption in connection with certain rig construction contracts entered into by subsidiaries of Sembmarine with Sete Brasil in 2012.

The charges are in relation to Operation Car Wash, a major anti-corruption probe in Brazil.

Brazil's Public Prosecutor's Office filed the charges in February against the men in their personal capacities. No charges were filed against the Sembmarine unit - Estaleiro Jurong Aracruz (EJA).

Cheah - former president of EJA - had his employment with Sembmarine terminated in June 2015.

Meanwhile, Sembmarine subsidiaries had engaged companies connected to de Jesus as consultants for rig construction contracts with Sete Brasil.

These contracts have been suspended, and remain suspended indefinitely, Sembmarine said.

Last July, Sembmarine lodged a suspicious transaction report with the Commercial Affairs Department in Singapore after revealing that its yard in south-east Brazil was raided and that Cheah was involved in the corruption probe.

Last October, it reached a long-awaited settlement with Sete Brasil for seven drillship and rig-building contracts that were frozen after Sete Brasil filed for bankruptcy.

In February this year, the Federal Courts of Curitiba sentenced de Jesus to 19 years and four months in prison, as well as a fine, after convicting him of corruption, money laundering and participation in a criminal organisation.

His case before the courts now is for further money laundering charges.

Sembmarine and Sembcorp Industries both called for trading halts yesterday morning.

THE BUSINESS TIMES