Brazil launches administrative enforcement procedure against 5 Keppel units

THE Office of the Comptroller General of Brazil (CGU) has published a notice in the Official Gazette stating that it has initiated an administrative enforcement procedure against five Keppel subsidiaries in relation to "alleged irregularities under the Brazilian Anti-Corruption Statute".

CGU has appointed two officials to form a panel to preside over the proceedings, Keppel Corp said in a bourse filing on Thursday.

The subsidiaries are: Keppel Offshore & Marine (Keppel O&M), Keppel Fels, Keppel Fels Brasil, BrasFELS, and Prismatic Services.

Keppel Corp said none of the subsidiaries have been served with the notice or any summons. As the notice did not provide any factual particulars, Keppel said it is "unable to assess the matter or its impact".

Keppel has been advised that following the issuance of the notice, the CGU will carry out further internal investigations. The panel will then decide if any summons is to be served on the subsidiaries, who will then have 30 days to file a defence.

Keppel understands from CGU that the administrative enforcement procedure will not affect its ongoing negotiations with Brazilian authorities over payments of a US$422.2 million fine imposed in 2017 for corrupt payments made by a former Keppel agent in Brazil.

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The fine is part of Keppel's global resolution with criminal authorities in the US, Brazil and Singapore.

Keppel O&M has already paid US$52.8 million to Singapore, and is to hand over a further US$52.8 million within three years from Dec 23, 2017, less any penalties paid by the unit to specified Brazilian authorities, it said.

The CGU is also considering suspending the latest administrative enforcement procedure "pending these ongoing discussions", Keppel added.

Shares of Keppel Corp were trading at S$6.05 by the midday break, down S$0.13 or 2.1 per cent.