Keppel says some transactions associated with former Brazil agent 'may be suspicious', shares fall

A Keppel employee looking out towards jack up rigs that are under construction at the Keppel FELS shipyard in Singapore, on Feb 2, 2013.
A Keppel employee looking out towards jack up rigs that are under construction at the Keppel FELS shipyard in Singapore, on Feb 2, 2013. PHOTO: BLOOMBERG

SINGAPORE - Keppel Corp announced on Monday morning (Oct 3) before markets opened that it "recognised" certain transactions associated with its former agent in Brazil, Zwi Skornicki, "may be suspicious."

Its statement to the Singapore Exchange refered to allegations in Brazil that illegal payments were made by Mr Zwi Skornicki in connection with contracts entered into between certain Keppel entities with Brazil state oil giant Petrobras and its oil rig supplier Sete Brasil.

Mr Skornicki, a former third-party commercial representative for Keppel in Brazil, had told a court in Brazil this year that Keppel's top managers authorised him to bribe public officials in exchange for Petrobras contracts that often exceeded a billion dollars.

Keppel had responded then with a strong denial that any of its executives had ever authorised any bribes.

"Following further internal investigations, Keppel recognises that certain transactions associated with Mr Skornicki may be suspicious," the company said in its Monday filing.

Keppel said it has notified the authorities in the relevant jurisdictions of its "intention to cooperate and work towards the resolution of the underlying issues arising from or in connection with the transactions."

It reiterated its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates.

Keppel declined to provide more details when asked by the Straits Times. "Due to the ongoing investigations, we are unable to make any further comments," a spokesman said.

In its filing, Keppel said the matter continues to be under review and it will make further announcements as appropriate. "Shareholders are advised to exercise caution when dealing with the securities of Keppel," it added.

Keppel shares fell on the news when trading opened on Monday. The counter was down 14 cents, or 2.6 per cent, to S$5.25 at 10:40am.

Shares of Sembcorp Marine were down 3.5 cents,or 2.7 per cent, to S$1.27. Semcorp Marine was also named in the corruption probe involving Petrobras and top Brazilian officials. Sembcorp Marine has strongly denied allegations it paid bribes.

Sete Brasil, whose main customer is Petrobras and the key client for the two Singaporean rig builders, has filed for bankruptcy, putting the contracts placed by the Brazilian firm in limbo.