Sembmarine unit’s ‘alleged irregularities’ linked to Brazil’s Operation Car Wash
Michelle Zhu
SEMBCORP Marine (Sembmarine) on Wednesday (Mar 29) clarified that preliminary administrative proceedings commenced by Brazil’s Comptroller General of the Union (CGU) against the group’s subsidiary, Estaleiro Jurong Aracruz (EJA), are related to past conduct linked to an ongoing probe into suspected money laundering and graft activities.
This is in reference to the group’s Mar 24 announcement that EJA was being investigated for “alleged irregularities” in its practices.
The CGU has not brought civil or administrative charges against Sembmarine or its subsidiaries, said the group. Sembmarine added that it will continue to cooperate and work with the Brazilian authorities on this matter.
Prior to its Mar 29 update, Sembmarine’s last announcement regarding Operation Car Wash was made through a circular to shareholders dated Jan 31.
The nationwide criminal investigation by the Federal Police of Brazil was first launched in 2014 as a money laundering investigation, eventually expanding to cover allegations of corruption, including at Petrobras.
Operation Car Wash was mentioned as one of the operational, business and political risks which Sembmarine cautioned that the enlarged group – following its acquisition of Keppel Offshore & Marine – may be exposed to.
Investigations into graft activities had begun with a search warrant on EJA in July 2019, and expanded to include EJA’s former president Martin Cheah. On this matter, Sembmarine said EJA had cooperated fully with the Brazilian federal police and provided material within the scope of the warrant.
Shares of Sembmarine closed S$0.005 or 4.6 per cent higher at S$0.115 on Wednesday.
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