Keppel Offshore & Marine agreed in December 2017 to pay US$422 million to authorities in the United States, Brazil and Singapore to resolve charges that it paid bribes to Brazilian officials to win Petrobras rig contracts. The decade-long scheme, run through agent Zwi Skornicki, was one of the largest foreign bribery resolutions of its time.
Authorities alleged a decade-long scheme in which tens of millions of dollars in bribes were paid to officials in Brazil, including at state oil giant Petrobras, to secure rig-building contracts. The payments were funnelled through intermediaries by Keppel's former agent in Brazil, Zwi Skornicki, with the knowledge or approval of former Keppel executives, and disguised through a series of shell companies using the global banking system, including US bank accounts.
Under the global resolution, Keppel Offshore & Marine accepted a conditional warning from Singapore's Corrupt Practices Investigation Bureau, entered into a deferred prosecution agreement with the US Department of Justice, and its Brazilian arm reached a leniency agreement with Brazil's federal prosecutors. Its US subsidiary pleaded guilty, as did a former senior member of Keppel's legal department. The penalty was split roughly US$211 million to Brazil, US$106 million to the United States and US$105 million to Singapore.
The settlement represented a 25 per cent discount off the bottom of US sentencing guidelines, credited to Keppel's cooperation and remedial measures. Those included disciplinary action against 17 current and former employees, with seven departures, demotions and written warnings for others, and approximately US$8.9 million in financial sanctions imposed on 12 individuals. Singapore authorities continued investigating the individuals involved, with several former senior executives arrested by CPIB in early 2018.
The case emerged from Brazil's sprawling Lava Jato, or Car Wash, investigation. As far back as 2015, Brazilian media had linked Keppel's Brazilian operations to the probe, and a 2014 plea bargain by a former Petrobras executive alleged Keppel paid bribes for contracts.
For Singapore, proud of its clean-governance image, the scandal was deeply embarrassing. It prompted soul-searching about oversight at government-linked companies and became a staple of business-school case studies on compliance failure. Keppel, which had booked provisions for the settlement, overhauled its compliance systems and eventually merged its offshore and marine business with Sembcorp Marine to form Seatrium in 2023.
US prosecutors said the scheme generated more than US$350 million in profits for Keppel from business corruptly obtained in Brazil. Then-acting US Attorney Bridget Rohde said the defendants had used the global financial system to disguise the source and disbursement of bribe payments through shell companies.
The roots of the case stretched back years: in 2014 a former Petrobras executive alleged in a plea bargain that Keppel paid bribes for contracts, and in 2016 Bloomberg published court documents naming five senior Keppel executives, including then-CEO Chow Yew Yuen, as having endorsed the payments. CPIB arrested several former senior executives in Singapore in February 2018 as its own probe continued.