Keppel Limited

[kichialo]

I will be more worried if Top Mgmt really dunno as so much money are involved.

Cory

You know the money can appear to be used for legitimate purpose. That is where intermediaries come in. There are always agents, subcontractors, distributors etc, and they may be asked to sign an agreement that they will not engage in corrupt practice.  These people will charge agent fees, consultation fees, negotiate addiitonal discounts, have payment tied to successful closure of contract etc. Over they years it add up. Unless the top management rose through the ranks and have worked in third world countries (especially in sales related roles), they may not be aware.  CFO's who have minimal contact with customers normally will not know. For some, they just "act blur" and "don't want to know". In fact Keppel's denial specifically is against the allegation they authorized the bribe. Of course they did not.

How guilty are these companies if they did not authorize the bribe and the intermediary whose behaviour they cannot always control, ran afoul of the law? Even if they are guilty, what are they guilty of? Corruption or lax in control? Any legal or ethics expert can comment?

If it was the agents , subcontractors or distributors etc., initiated the bribery and not endorsed by Keppel , why should keppel agree to pay for the combined total penalty of more than US$422 million to resolve charges with authorities in the United States, Brazil and Singapore . Is the management of Keppel that niave or generous ?

I am just trying to explain how it is possible for the top management to be kept in the dark despite the amount of money involved. But you have raised a  valid question. Let me ask another question, can a person or company found guilty of corruption resolve the charges in this manner without a trial? To be found guilty of corruption has serious consequences. At the individual level, I think some KOM staff may have to face trial. Why not the company? Perhaps the company is guilty of something else and not corruption. Again comments from legal experts will be most welcome.

With this latest news on the senior lawyer that make a deal, are we still so naive to still insist ? Maybe is our system or education but Singaporeans need to wise up to the "ugly side of humans".

Cory

No wonder Keppel settled. 

[tonylim]

http://www.scmp.com/week-asia/politics/a...-singapore

Elsewhere, political blogger Andrew Loh said questions remained on why the company’s top brass – including its chairman Lee Boon Yang – were not aware of the extent of the graft.

Lee is a former cabinet minister and concurrently holds the chairmanship of Singapore Press Holdings, the publisher of The Straits Times newspaper.

The court documents said the bribes were paid between 2001 and 2014. Lee Boon Yang took over as chairman in 2009. His predecessor, Lim Chee Onn, also a former minister, helmed the company from 2000 to 2008.

[Lim Chee Onn Photo: AFP] Lim Chee Onn Photo: AFP

“If the chairman and CEO and the board did not know, then they must be grossly incompetent,” Loh wrote.

Jeffrey Chow, the former Keppel lawyer who pleaded guilty, had reportedly said in his plea hearing that he became aware of the graft when he drafted contracts with a company agent who was being overpaid by millions of dollars.

“I should have refused to draft the contract that we used for paying bribes and I should have resigned from Keppel,” Chow said, according to a Reuters report quoting court transcripts.

The deferred prosecution agreement published on the US justice department website said Keppel O&M received “full credit for its substantial cooperation” into the investigations.

Among other things, seven employees implicated in the saga were “separated” from the company, and it imposed some US$8.9 million in “financial sanctions” on 12 former or current employees, the documents said. The US$422 million settlement will be distributed between the US, Brazil and Singapore.

[Art or Science]

Keppel O&M sanctioned 17 current, former employees over Brazil bribery case

http://www.channelnewsasia.com/news/sing...ed-9820800

Compliance.. How to determine if one is guilty of negligence or something more sinister (for lack of a better word)?

[yeokiwi]

http://www.straitstimes.com/business/com...l-payments

"The illegal payments were deliberately concealed by those complicit in the bribery and structured as agency fees. The agency fees were not approved by the boards of Keppel Corporation or KOM as they were built into the contract values of the respective projects, and bidding for projects is in the ordinary course of KOM's business," a Keppel spokesman told BT yesterday. "The current boards of Keppel Corporation and KOM were not aware of the illegal payments."

So, is the board inept or ignorant?
I am not even sure whether being ignorant is positive especially with decades of corporate/country management experience.
And the board chairman is drawing $750k yearly.

http://www.kepcorp.com/annualreport2016/...nance.html

[weijian]

http://www.straitstimes.com/business/com...l-payments

"The illegal payments were deliberately concealed by those complicit in the bribery and structured as agency fees. The agency fees were not approved by the boards of Keppel Corporation or KOM as they were built into the contract values of the respective projects, and bidding for projects is in the ordinary course of KOM's business," a Keppel spokesman told BT yesterday. "The current boards of Keppel Corporation and KOM were not aware of the illegal payments."

So, is the board inept or ignorant?
I am not even sure whether being ignorant is positive especially with decades of corporate/country management experience.
And the board chairman is drawing $750k yearly.

http://www.kepcorp.com/annualreport2016/...nance.html

Bribes paid ~50mil
Profits obtained by Keppel ~350mil.
Estimate ~7% NPM for these rigs, contract values would be 5bil.

So building 50mil (1%) into the total 5bil contract values wouldn't be exactly easy to find out, especially from an office located in the other part of the world. Would Keppel Corp been a conglomerate create a board diversity that is not able to pinpoint such specific business practices? That said - are we actually suffering from some sort of halo effects that we built in too high expectations? From "the Fed will save the world", "superstar fund managers" to "ministers that should earn millions in private sector" (although recently affirmed by WKS becoming UOB chairman) - all these seem to have been debunked or failed our expectations.

[cfa]

EIG Hits Keppel With $660M RICO Suit Over Brazil Bribery


https://www.law360.com/articles/1010526/...il-bribery

[Bibi]

I think if Kepple lost this suit, it can declare bankrupt already as many more will try their luck.

[CY09]

If the basic premise of the case is that the EIG lost money directly due to the bribery issue at Keppel when it invested in Keppel, then it is a valid point for lawsuit. However, if they are unable to prove this, the grounds of lawsuit is shaky.

[BlueKelah]

If the basic premise of the case is that the EIG lost money directly due to the bribery issue at Keppel when it invested in Keppel, then it is a valid point for lawsuit. However, if they are unable to prove this, the grounds of lawsuit is shaky.

I think the bribery issue is more or less proven since they have already been fined, specifically criminally fined....
According to this article :

http://www.straitstimes.com/business/com...olution-on
[SINGAPORE - Keppel Corporation's offshore and marine unit has reached a global resolution with criminal authorities in the United States, Brazil and Singapore in relation to corrupt payments made by a former agent in Brazil. The resolution, involving three jurisdictions across the world, is unprecedented for a Singapore company.

As part of the resolution, Keppel Offshore & Marine (Keppel O&M) will pay fines amounting to US$422.2 million (S$570 million), to be allocated between the US, Brazil, and Singapore, the Singapore-listed conglomerate said in a statement early Saturday (Dec 23).

Of the US$422.2 million in fines, Keppel O&M will pay about US$105.6 million to the US, including a US$4.7 million criminal fine by Keppel O&M USA.]

[cfa]

Can they sue Keppel for lying throughout the accusation ?