Sembcorp Marine lodges report with CAD following Brazil probe

Singapore

SEMBCORP Marine said that it has lodged a report with the Commercial Affairs Department of the Singapore Police Force, after revealing last week that its yard in the south-eastern state of Brazil was raided and the facility's former president was involved in a corruption probe.

Present investigations involve Martin Cheah Kok Choon, the former president of SembMarine's Brazil unit, Estaleiro Jurong Aracruz (EJA), during the time when he was in the employment of the group.

In this light, SembMarine has "lodged a suspicious transaction report . . . with the Commercial Affairs Department of the Singapore Police Force", according to its exchange filing on Monday.

SembMarine said that Mr Cheah's employment with the group was terminated in June 2015.

Other than Mr Cheah, "the company is not aware that any director or management of the company is a subject of the current investigations being conducted by the Brazilian authorities", it said.

SembMarine added that due to the "evolving nature" of the matters in Brazil, the internal investigations being conducted by the company are still ongoing and have not yet been concluded.

"The internal investigations remain legally privileged," it said.

SembMarine's counter faced a sell-off last Thursday after news of the scandal renewed fears over potential fines, compounding worries for the highly-geared offshore and marine company that was already dealing with an industry downturn.

Its stock tumbled 13 Singapore cents or 8.4 per cent to finish at S$1.41, after falling by nearly 10 per cent in intraday trade on heavy trading volumes of over 30 million shares - over six times its average daily trading volume over one year - worth S$43 million.

On Monday, its shares closed 0.70 per cent lower at S$1.41 with nearly three million shares changing hands, before the announcement.

In a separate exchange filing on Monday, SembMarine said it will be announcing its Q2 2019 financial results on July 30.

For the first quarter, the company saw net profit sink 67.8 per cent to S$1.7 million on the back of an overall lower business volume.

Group revenue slipped 31.3 per cent to S$810.6 million, as compared to S$1.18 billion a year ago, mainly due to lower revenue recognition from rigs and floaters and offshore platform projects.

SembMarine had noted that global capex spend for offshore exploration and production would continue to improve but also said that "competition remains intense". It had added that production activity for the group is expected to remain low.