Keppel unit to pay $422 million to resolve Petrobras bribery probes

(Reuters) - Keppel Corporation Ltd's KPLM.SI offshore rig building business will pay more than $422 million to resolve charges it bribed Brazilian officials, including some at state-run oil company Petrobras PETR4.SA, U.S. authorities said on Friday.

A Keppel Corporation logo in the central business district of Singapore February 22, 2016. REUTERS/Edgar Su

Keppel Offshore & Marine Ltd agreed to pay the combined penalty to resolve investigations by authorities in the United States, Brazil and its home country of Singapore, the U.S. Justice Department said.

The company entered into a deferred prosecution agreement while a U.S. subsidiary, Keppel Offshore & Marine USA Inc, pleaded guilty in federal court in Brooklyn to conspiring to violate the U.S. Foreign Corrupt Practices Act.

The Justice Department also revealed that a former member of the company’s legal department secretly pleaded guilty in August in connection with the ongoing investigation. That person’s identity could not be immediately determined.

Keppel Corporation Chairman Lee Boon Yang said the Singapore-based company regretted the actions that took place in Brazil.

“Integrity is one of Keppel’s core values,” he said in a statement. “We do not and will not tolerate any illegal activity in the conduct of our business.”

Petroleo Brasileiro SA, also known as Petrobras, has been at the center of Brazil’s largest ever corruption scandal amid investigations into political kickback schemes involving contractors.

The Justice Department said that from 2001 to 2014, Keppel Offshore & Marine engaged in a scheme to pay $55 million in bribes to officials at Petrobras and the then-governing political party in Brazil, the Workers Party of Brazil.

The bribes were paid to win 13 contracts with Petrobras and Sete Brasil Participacoes SA, a privately-held Brazilian company that commissioned a large fleet of rigs for Petrobras’ use, according to charging documents.

Keppel concealed the bribes by making payments to a consultant, who in turn facilitated the bribes by transferring money to bank accounts controlled by or for the benefit of the Brazilian officials, the charging papers said.

In total, the company earned $351.8 million through the bribery scheme, according to court papers.

The Justice Department said Keppel Offshore & Marine had agreed to pay about $422.2 million, of which the United States would receive almost $105.6 million.

The Justice Department said Brazil will receive more than $211 million and Singapore will receive up to $105.6 million.

Keppel said Keppel Offshore & Marine has accepted a conditional warning from Singapore’s Corrupt Practices Investigation Bureau and that a subsidiary reached a leniency agreement with Brazilian prosecutors.

Reporting by Nate Raymond in Boston; Editing by Tom Brown