Keppel Corporation yesterday underlined its zero tolerance for any form of illegal activity as its offshore unit is caught up in Brazil's biggest corruption probe.
"Keppel reiterates its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates, and will take all necessary steps to eradicate such conduct if discovered," it said in a statement to the Singapore Exchange.
Mr Zwi Skornicki , who was once an agent of Keppel Corp subsidiary Keppel Fels, was arrested by police in Brazil on Monday. He is suspected of having paid bribes to state- run oil giant Petrobras directors to manipulate the awarding of construction contracts.
Brazilian police said on Monday they were investigating possible bribes paid in contracts signed by Petrobras and shipbuilder Sete Brasil with Keppel Fels.
Keppel issued its statement before the market opened yesterday. The stock closed one cent or 0.2 per cent higher at $5.22.
The conglomerate referred to its earlier announcement on Feb 9 last year in relation to allegations made by Mr Pedro Jose Barusco that Mr Skornicki had made the illegal payments.
Mr Barusco is a former Petrobras executive who has agreed to provide testimony to Brazil's federal police in exchange for leniency.
Keppel said it has since put the agency relationship between Keppel's entities and Mr Skornicki on hold, pending determination by the relevant authorities into the allegations made on the matter.
The arrest of Mr Skornicki comes as federal police in Brazil carried out a fresh wave of searches and arrests in ongoing "Operations Car Wash" corruption probe that began nearly two years ago.
The Brazilian authorities are investigating allegations that Petrobras contractors, which include many of the country's largest construction groups as well as foreign companies, paid bribes to the oil company's executives and politicians from the ruling coalition led by President Dilma Rousseff's Workers' Party in exchange for tens of billions of dollars in contracts.
The prosecutor's office said on Monday it was investigating "possible crimes of corruption, foreign currency evasion and money-laundering resulting from a diversion of funds from Petrobras".
It alleged that the funds were diverted from Petrobras to a prominent political consultant, Mr Joao Santana, by Mr Skornicki and by offshore firms controlled by Brazilian construction giant Odebrecht Group.