Keppel's Brazilian agent dodges fraud charges

But Brazilian Public Prosecutor's Office says there's proof of his illegal activities

A Keppel agent in Brazil caught up in an ongoing corruption probe over bribes paid to directors of state-run oil company Petrobras has yet to be charged over illegal cartel activities and fraud against competitive bidding.

The Brazilian Public Prosecutor's Office said there is some evidence such offences - allegedly in relation to the manipulation of the awarding of construction contracts - have been committed.

Zwi Skornicki, who was arrested in February, is being investigated over allegations of possible bribes paid in contracts signed by Petrobras and shipbuilder Sete Brasil with certain Keppel entities, including Keppel Fels.

Skornicki was arrested after Pedro Jose Barusco, a former Petrobras executive who gave testimony to Brazil's federal police in exchange for leniency, made the allegations against him.

"The Brazilian Public Prosecutor's Office had highlighted in the report that although there was also evidence of illegal cartel activities and fraud against competitive bidding, charges were not being filed against Mr Skornicki for such possible offences at this point in time," Keppel said on Thursday.

The agency relationship between Keppel's entities and Skornicki has been put on hold, pending the outcome of the investigation.

The agency relationship between Keppel's entities and Skornicki has been put on hold, pending the outcome of the investigation. Keppel Fels first engaged Skornicki's company, Eagle do Brasil, as an agent for a project in late 2005.

Keppel Fels first engaged Skornicki's company, Eagle do Brasil, as an agent for a project in late 2005.

The Brazilian authorities, for the past two years, have been investigating allegations that Petrobras contractors paid bribes to the oil company's executives and politicians from the ruling coalition led by Brazilian President Dilma Rousseff's Workers' Party, in exchange for tens of billions of dollars in contracts. In addition to being charged with corruption in late April, Skornicki was also charged with criminal conspiracy and money laundering together with seven other individuals, according to Brazilian media reports.

Keppel, in a statement on Thursday, said it has obtained a copy of the Brazilian public prosecutors' report on the charges. But when queried by The Straits Times, it said it was not at liberty to share the document with third parties.

The seven people include Barusco; Petrobras' former head of corporate services Renato De Souza Duque; political consultant Joao Cerqueira de Santana Filho as well as Joao Vaccari Neto, a former treasurer of the Workers' Party.

Vaccari was accused of channelling money from alleged corruption at Petrobras to the Workers' Party in the form of corporate donations, according to media reports. He has been sentenced to 15 years and four months in jail for corruption and money laundering.

Duque was sentenced to 20 years and eight months in prison for inflating contracts at Petrobras and paying part of the money to the Workers' Party in the form of donations.

Keppel on Thursday reiterated its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates, and said it will take all necessary steps to eradicate such conduct if discovered.

A version of this article appeared in the print edition of The Straits Times on May 07, 2016, with the headline 'Keppel's Brazilian agent dodges fraud charges'. Print Edition | Subscribe