Keppel shares plunge on US$422 mln Brazil bribery fine

Keppel Logo.

Shares of mainboard-listed Keppel Corp fell as much as 5 percent to S$7.09 on the Singapore Exchange on Tuesday.

The decline comes after the U.S. Department of Justice imposed a penalty of US$422 million on Keppel Offshore & Marine (KOM).

The fine was due to the company's involvement in a scheme to pay bribes to Petrobras officials and the then governing political party in Brazil, the Workers Party of Brazil between 2001 to 2014, the company said in a statement on December 23.

Keppel said it undertook a thorough internal investigation and identified certain suspicious transactions involving KOM's former agent in Brazil, Zwi Skornicki.

"As part of the resolution, KOM will pay fines in an aggregate amount of approximately S$570 million to be allocated between the U.S., Brazil, and Singapore," the company said.

Singapore authorities said investigations in respect of the individuals involved are ongoing.

Also Read: Singapore's competition watchdog asks public feedback on proposed ComfortDelGro-Uber deal

Based on the latest statements for the financial year ended 2016, had the fines been imposed on December 31 last year, the net asset per share as at December 31, 2016, would have decreased from S$6.34 (before the fines) to S$6.03 (after the fines).

Had the fines been imposed on January 1 last year, the earnings per share for the 2016 fiscal year would have dropped from 43.2 Singapore cents (before the fines) to 11.7 cents (after the fines).

Keppel also said that if the fines had been paid at the end of 2016, net gearing would have increased from about 0.565 times then to around 0.64 times, marking a rise of about 7.5 percent.

"Today's settlement means we can draw a line under this difficult issue which has been a key focus of the board and senior management since the bribery allegations first emerged, and look to the future," Loh Chin Hua, CEO of Keppel Corp said.

This article was first published on December 26, 2017