Do Keppel and SembMarine need to raise Sete Brasil provisions?

THE US$221 million lawsuit filed by US-based fund house EIG Investment in Washington is widely seen as the start of a series of litigation that companies in the US would be pursuing against Petrobras as they seek protection from the long arms of the Federal Corrupt Practices Act to recover their investments in Brazil.

Keppel Offshore and Marine and Sembcorp Marine - as the named yards in the now bankrupt Sete Brasil's rig building contracts - could inadvertently be drawn into the ensuing legal battles. This after EIG reportedly added Brazil's engineering conglomerate Odebrecht SA and a few other shipyards - including Keppel Corp and SembMarine - as defendants in its suit. Sete Brasil is the rig-owning arm of Petrobras.

EIG was said to have alleged in its filing that Petrobras, along with the other named parties, misled the investment firm to invest over US$221 million of equity in Sete Brasil and that "through a series of misrepresentations and omissions directed at EIG, Petrobas fraudulently procured the funds' investment..."