Keppel stresses zero-tolerance stance on bribery after new arrests in Petrobras graft probe

Keppel Corp reiterated its zero-tolerance stance against any form of illegal activity involving its employees or associates amid a corruption probe.
Keppel Corp reiterated its zero-tolerance stance against any form of illegal activity involving its employees or associates amid a corruption probe. PHOTO: REUTERS

SINGAPORE - Keppel Corp reiterated on Tuesday (Feb 23) its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates, after Brazilian police said on Monday (Feb 22) they were looking into possible bribes paid in contracts signed by state-run oil company Petrobras and shipbuilder Sete Brasil with Keppel Fels, a subsidiary.

Keppel said it would take all necessary steps to eradicate such conduct if discovered, in a filing to the Singapore Exchange before trading opened.

On Monday, the federal police in Brazil carried out a fresh wave of searches and arrests in the ongoing Operations Car Wash corruption investigation begun nearly two years ago. The authorities in Brazil 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.

Brazil's 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 Joao Santana by a financial operator, Mr Zwi Skornicki, and by offshore firms controlled by the Odebrecht Group, a Brazilian construction giant.

Mr Skornicki was arrested on Monday. He is suspected of having paid bribes to Petrobras directors to manipulate the awarding of construction contracts.

In its filing on Tuesday, Keppel referred to its earlier announcement on Feb 9, 2015, "in relation to allegations made by Mr Pedro Jose Barusco in Brazil that illegal payments were made by Mr Zwi Skornicki in connection with contracts entered into between certain Keppel entities with Petrobras and/or Sete Brasil".

Keppel said it had since put the agency relationship with Mr Skornicki on hold pending determination by the relevant authorities into the allegations made on the matter.

"We are unable to comment further in view of the ongoing investigations in Brazil," Keppel said.

Mr Barusco is a former Petrobras executive who has agreed to provide testimony to Brazil's federal police in exchange for leniency.