by NILE BOWIE
A Keppel Corporation logo in the central business district of Singapore February 22, 2016. PHOTO/Reuters/Edgar Su
State shipbuilder’s US$55 million bribes-for-business scandal has raised questions about the city-state’s supposed incorruptibility
One of the largest corruption scandals in the history of Singapore’s corporate sector has come to glaring light, tarnishing the image and credentials of prominent state-backed conglomerate Keppel Corp and raising questions about the city-state’s supposed incorruptibility.
Its subsidiary, Keppel Offshore & Marine Ltd (KOM), the world’s largest builder of oil rigs, has been implicated in a 13-year-long US$55 million bribery scheme involving Brazilian executives and politicians to win business deals.
KOM’s US subsidiary last month pleaded guilty to conspiring to violate anti-bribery laws and agreed to pay US$422 million in criminal fines as part of a deferred prosecution agreement with the US Department of Justice (DoJ), as well as authorities in Brazil and Singapore.
KOM made the bribe payments between 2001 and 2014 through a chain of shell companies that used the US banking system to conceal and disperse kickbacks, according to court documents released by the DoJ. The documents claimed the company “knowingly and willfully conspired” to win business through bribery.
The illegal payments were made mainly to officials at Brazil’s state-owned oil giant, Petroleo Brasileiro SA (Petrobras), the largest listed company in Latin America.
The scheme enabled the Singapore-listed company to secure 13 contracts with Petrobras and another Brazilian entity, Sete Brasil Participacoes SA (Sete Brasil), securing KOM and its related entities US$351.8 million in earnings.
Both Petrobras and Sete Brasil have been embroiled in Brazil’s largest corruption investigation – “Operation Car Wash” – which ensnared almost a third of Brazil’s current government ministers and revealed millions of dollars laundered under legitimate consulting agreements.
Illicit payments were transferred to Petrobras officials who channeled funds to politicians at the then-ruling Workers’ Party for use in election campaigns. The sprawling graft probe, carried out by Brazil’s federal police beginning in 2014, sparked events that led to the arrests of top executives, politicians and the 2016 impeachment of former president Dilma Rousseff.
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