Singapore: CPIB begins probe into Seatrium for alleged corruption in Brazil

Marine engineering firm Seatrium, formed by the merger of Sembcorp Marine and Keppel Offshore and Marine (KOM) earlier this year, is off to a rough start after being slapped with investigations by Singapore authorities. 

Seatrium on Thursday (1 June) said the Corrupt Practices Investigation Bureau (CPIB) on 31 May released a statement stating that it has commenced investigations against the company and individuals from the company on alleged corrupt offences that occurred in Brazil. 

“The company believes that this relates to events that occurred prior to 2015 and to the Sembcorp Marine group in existence at that time,” it said in a company announcement.  

“Those events predate the merger with Keppel Offshore & Marine which only took place in February 2023.”

Seatrium added it is unable to comment further at this stage as the investigations are still ongoing.

“The company is cooperating with CPIB in its investigations and will make appropriate announcements in the event of any material developments,” it said. 

“The company wishes to reiterate it is committed to the highest standards of compliance with anti-corruption laws and does not condone and will not tolerate any improper conduct. The company has a strict compliance programme and continuously works to ensure that policies and procedures are in place to prevent any violation of any anti-corruption laws applicable to its operations.”

Before publishing the announcement, Seatrium requested for a trading halt in a filing at 7.35am on 1 1 June due to the pending release of the announcement and then requested for the lifting of the halt at 9.59am on 1 June. 

On 3 April, Semcorp Marine proposed a name change from Sembcorp Marine to Seatrium Limited  following completion of the combination of the businesses of the company and Keppel Offshore & Marine Ltd on 28 February 2023, and will adopt a new branding for the enlarged entity.

When queried by Channel News Asia (CNA) if the alleged offences were linked to a bribery case involving former KOM employees and Brazilian oil major Petrobras, CPIB said it was unable to divulge further details as the investigations were still ongoing.

On 16 January, Manifold Times reported CPIB issued stern warnings on 11 January 2023 to six individuals who were formerly senior management staff of KOM. 

The stern warnings were issued to the six individuals in lieu of prosecution for offences punishable under the Prevention of Corruption Act (PCA).

At the time, CPIB said it had completed its investigations of the case and in consultation with the Attorney-General’s Chambers (AGC).

The offences relate to bribe payments to officials of Brazilian state-owned corporation Petróleo Brasileiro S.A. (Petrobras), pertaining to rigs-building contracts which Petrobras and/or its related companies had awarded to KOM. Under the global resolution led by the Department of Justice of the United States of America and involving Brazil and Singapore, a conditional warning in lieu of prosecution was issued to KOM for offences punishable under the PCA. KOM has paid a total fine of USD 422 million and fulfilled all obligations under the conditional warning.

CPIB conducted investigations into the six individuals who had allegedly conspired with each other to give bribe payments totalling about USD 55 million to foreign consultants involved in KOM’s business interests in Brazil. These consultants then used these monies to pay bribes to Petrobras officials.

Related: Singapore issues stern warnings to six former Keppel O&M staff for bribery
Related: Singapore-based firm Sembcorp Marine proposes name change to Seatrium
Related: Keppel Corporation and Sembcorp Marine merger concludes at USD 3.34 billion

Photo credit: Pepi Stojanovski from Unsplash
Published: 1 June, 2023