The former president of Sembcorp Marine's (SembMarine) wholly-owned Brazilian subsidiary Estaleiro Jurong Aracruz (EJA) has been charged in Brazil.

The counts against Martin Cheah Kok Choon include money laundering and graft in connection with certain drilling rig construction contracts entered into by SembMarine subsidiaries with rig supplier Sete Brasil in 2012.

Cheah's employment with the SembMarine group was terminated in June 2015.

In addition, Guilherme Esteves de Jesus was also charged with money laundering. Companies connected to him were engaged by SembMarine's units as consultants in Brazil.

SembMarine yesterday said all such consultancy contracts have been suspended. It added that the charges in Brazil were filed against the two men in their personal capacities, and not against EJA.

In the light of the latest developments, SembMarine said it will be lodging a further suspicious transaction report with the Commercial Affairs Department (CAD) of the Singapore Police Force.

SembMarine lodged a suspicious transaction report with the CAD last July after revealing that its yard in Brazil was raided and that Cheah was involved in a corruption probe.

SembMarine reached a settlement last October with Sete Brasil for seven drillship contracts worth billions of dollars that were frozen after the Brazilian firm was forced to file for bankruptcy amid a sweeping graft probe.

SembMarine shares closed down 0.9 per cent at $1.15 yesterday.

THE BUSINESS TIMES