Keppel Corporation's offshore and marine unit, Keppel Offshore and Marine (Keppel O&M), has reached a joint resolution with Brazilian authorities by signing a leniency agreement and by paying around US$65 million ($88.3 million), putting a conclusion to the long-running corruption case.
The settlement, with the Brazilian Attorney-General’s Office (AGU) and Comptroller General of the Union (CGU), was in relation to the corrupt payments made by Keppel O&M's former agent in Brazil, which was previously announced in December 2017.
That was when Keppel announced a global resolution reached with criminal authorities in Brazil, the United States and Singapore. Back then, Keppel had already paid some US$422 million to authorities including the US Department of Justice, and Brazil's Public Prosecutor’s Office.
According to Keppel, AGU and CGU are authorities that have a parallel mandate with the Brazilian criminal authorities to enforce certain anti-corruption laws. Therefore, Keppel had to engage in a separate negotiation process with AGU and CGU following the conclusion of the December 2017 agreement,
In addition to the amount paid, Keppel O&M has also committed to continuing cooperation with AGU and CGU, and to ongoing compliance enhancements.
Back when the 2017 global resolution was announced, Singapore authorities, the Attorney General's Chambers and the Corrupt Investigation Bureau had agreed for KOM to pay the balance sum of US$52.78 million. Keppel O&M had also received a conditional warning from CPIB.
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Keppel O&M was supposed to pay this balance within three years but the credit period was extended to March 23 2023 given its then-ongoing discussions with CGU and AGU. CPIB has also allowed KOM to credit this US$52.78 million to the Brazilian authorities towards the fines levied.
According to Keppel, the "leniency agreement results from Keppel O&M’s full cooperation with AGU’s and CGU’s investigations, which the two authorities recognized along with KOM’s extensive remediation efforts and significant compliance enhancements in response to the issues involving the former agent in Brazil.
"Keppel remains committed to maintaining high ethical standards and robust controls in all its global operations.
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According to Keppel, with the leniency agreement, it does not expect any further grounds for liability in Brazil in relation to these issues. The agreement will not have any material impact on its net tangible assets and earnings per share for the current financial year.
Shares in Keppel Corp closed 2 cents lower or 0.27% down at $7.31 on Dec 19.
/Update
On Jan 30, 2023, Keppel O&M announced that it may "avail itself" of the crediting of up to US$52.78 million towards the fines levied. It added that it has made "full payment" of the fines and damages payable under the leniency agreement.
