Keppel says Zwi Skornicki transactions "may be suspicious"

RIGBUILDER and property conglomerate Keppel Corporation has admitted that a former Brazil agent might have engaged in illegal activity.

"Following further internal investigations, Keppel recognises that certain transactions associated with Mr (Zwi) Skornicki may be suspicious," the firm said in an announcement on Monday morning.

"Keppel has notified the authorities in the relevant jurisdictions of its intention to cooperate and work towards the resolution of the underlying issues arising from or in connection with the transactions."

In August, news agency Bloomberg reported that Mr Skornicki - who was arrested in February - told a Brazil judge that he was authorised by five Keppel executives to bribe public officials in exchange for contracts from oil and gas giant Petrobras.

Keppel responded then that it strongly denied the allegations and said none of the executives have ever authorised any bribes.

Petrobras, Brazil's national oil company, is currently ensnared in a scandal in which its directors are alleged to have colluded with politicians to redirect money out of contracts for personal use or to fund political campaigns.

The scandal has led indirectly to the impeachment of Brazil president Dilma Rousseff, whose Workers' Party (PT) has appointed its and its coalition partners' candidates to key Petrobras positions.

Meanwhile, the scandal has also rippled down Petrobras' supply chain.

Keppel's major customer Sete Brasil supplies Petrobras, and ran into cashflow problems funding the construction of rigs. Sete, which ordered billions of dollars of rigs from Keppel, filed for bankruptcy protection earlier this year.

Last month, a visiting representative of the Brazilian government said it is looking to start discussions with Keppel and fellow rigbuilder Sembcorp Marine to find solutions to their challenges.

Keppel last traded at S$5.39.

More: Hot stock: Keppel Corp down 2.6% after announcing "suspicious" Skornicki deals