19 Dec 2022

Keppel Offshore & Marine Reaches Joint Resolution With Brazilian Attorney-General And Comptroller General

• Keppel Offshore & Marine (“KOM”) has reached a joint resolution with the authorities in Brazil, namely Brazilian Attorney-General’s Office (“AGU”) and Comptroller General of the Union (“CGU”), in relation to the corrupt payments made by a former agent of KOM in Brazil, which was previously announced in December 2017.
  
  
• Following KOM’s full cooperation with AGU’s and CGU’s investigations, KOM entered into a leniency agreement with the two authorities and committed to a total payment of R$343,571,455.25 (equivalent to approximately US$65 million)^[1] in fines and damages.
  
  
• The Attorney-General’s Chambers of Singapore (“AGC”) and the Corrupt Practices Investigation Bureau (“CPIB”) have agreed in principle to allow KOM to seek crediting of up to US$52,777,122.50, pursuant to the terms of the CPIB Conditional Warning issued on 23 December 2017, in respect of the fines payable by KOM to the Brazilian authorities.
  
  
• With the earlier leniency agreement with the MPF and this additional agreement, both of which provide for the payment of fines and damages in connection to the same matter, KOM does not expect further grounds for liability in Brazil in relation to these issues.
  
  
• Keppel reiterates its zero tolerance of corruption and its ongoing commitment to ethical practices across its global operations.

Keppel Corporation Limited (“Keppel”) wishes to inform that KOM has reached a joint resolution and concluded a leniency agreement with the authorities in Brazil, namely the AGU and the CGU. This is in relation to the corrupt payments made by KOM’s former agent in Brazil, which was previously announced in December 2017, following the global resolution reached with criminal authorities in Brazil, the United States and Singapore.

In Brazil, AGU and CGU are authorities that have a parallel mandate with the Brazilian criminal authorities to enforce certain anti-corruption laws.  Keppel therefore engaged in a separate negotiation process with AGU and CGU following the conclusion of the 19 December 2017 Leniency Agreement with the Public Prosecutor’s Office in Brazil (the Ministerio Publico Federal or “MPF”). 

This additional leniency agreement with AGU and CGU brings to conclusion the negotiations with the authorities in Brazil relating to KOM’s former agent in Brazil.  This settlement also resolves CGU’s administrative enforcement procedure against KOM and several other KOM entities, which, as announced by Keppel on 20 August 2020, had been suspended pending the ongoing discussions with these Brazilian authorities. 

KOM has committed under the leniency agreement to a payment of fines and damages to the Brazilian Federal Treasury and Petrobras totaling  R$343,571,455.25 (equivalent to approximately US$65 million)^[1] within 30 days from the signing of the leniency agreement. KOM has also committed to continuing cooperation with AGU and CGU, and to ongoing compliance enhancements.

As part of the 2017 global resolution, AGC and CPIB had agreed for KOM to pay the balance sum of US$52,777,122.50 within three years from the date of the Conditional Warning, less any fines and criminal penalties paid by KOM to specified Brazilian authorities (namely CGU and AGU). As previously announced by Keppel, AGC and CPIB had subsequently extended the credit period to 23 March 2023 in the light of KOM’s then ongoing discussions with CGU and AGU. AGC and CPIB have agreed in principle to allow KOM to seek crediting of up to US$52,777,122.50 in respect of the fines payable by KOM to the Brazilian authorities pursuant to the terms of CPIB’s 2017 Conditional Warning.

The leniency agreement results from KOM’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. 

The leniency agreement with the MPF and this additional leniency agreement by KOM with AGU and CGU each provides for the payment of fines and damages in connection to the same matter.  With the two leniency agreements in place, KOM does not expect there to be any further grounds for liability in Brazil in relation to these issues.

The above is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year.

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^[1] _{The settlement amount is subject to both inflation and currency adjustment until the date of KOM’s payment of the settlement amount.}