SBM Offshore shares hit by fresh bribery allegations

AMSTERDAM Fri Feb 7, 2014 7:17am EST

AMSTERDAM Feb 7 (Reuters) - SBM Offshore shares plunged on Friday after media reports raised fresh concerns about allegations of corrupt payments by the Dutch maritime engineering group, which some analysts said raised the prospect of hefty fines against the company.

The group declined to comment on the specific allegations in Dutch business magazine Quote and on the group's Wikipedia page. Asked about the allegations, Head of Investor Relations Nicolas Robert said: "We are unable to comment on the specifics of what has been published, the names, numbers, countries."

He said this was because of an investigation into the alleged payments which the company had already announced.

SBM Offshore said in 2012 it had started investigating alleged payments involving sales via intermediaries between 2007 and 2011.

It later disclosed it might have violated anti-corruption laws and could be subject to criminal investigation for alleged payments of bribes to officials in African countries.

SBM Offshore has also said the investigation centres around potentially improper sales practices in two countries in Africa, and in one other country outside Africa, but said it was not possible to give more information or an estimate of the potential outcome.

Robert repeated that stance, saying: "We've never provided any sort of guidance on the potential liability related to the investigation and we have not taken a provision in our accounts."

ONGOING INVESTIGATION

It an earlier statement, the company referred to the Wikipedia allegations saying: "Since the investigation is still ongoing, SBM Offshore cannot comment on its contents, however it is safe to note that it is partial, taken out of context and to the extent factually correct, is outdated.

"As such, it is not representative of the facts as the company understood them then, or understands them now," the statement said.

It said its own investigation was being conducted by outside counsel and forensic accountants, "which has been publicly disclosed and of which the competent authorities and investors have been informed by the company for over 18 months."

ING analyst Quirijn Mulder said in a research note the allegations pointed to a far more serious problem than previously believed, prompting ING to remove SBM Offshore from its Benelux favourites list.

"The implications are larger than many, ING included, had expected and could eventually have a bigger impact than considered thus far," Mulder said.

"Our overall estimate of a $100-150 million charge for one African country is too low and even our worst case of $400 million might be too low."

SBM Offshore shares were down more than 16 percent by 1139 GMT and hit their lowest level in about 11 months.

SBM Offshore has been hit by a steady stream of bad news over the past two years, including heavy losses and a management shake-up. ($1 = 0.7353 euros) (Reporting by Sara Webb; Editing by David Holmes)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.