Singapore’s state-backed corporate heavyweights – collectively known as “Singapore Inc” – will face tough questions in 2018 on their commitment to the Lion City’s vaunted anti-corruption ethos, observers say, as a shocked public comes to grips with a graft scandal that has engulfed oil rig builder Keppel Corp.
One political observer went as far as to describe 2017 as “annus horribilis” for the city state’s corporate sector. That sentiment echoed the hand-wringing among government critics that followed last week’s announcement by US prosecutors that Keppel’s offshore and marine arm, Keppel O&M, agreed to pay a US$422 million settlement to avoid a criminal trial for bribing Brazilian officials.
Keppel O&M, according to court documents released by the US justice department, engaged in a scheme between 2001 and 2014 to pay US$55 million in bribes to win 13 contracts with Petrobas and Sete Brasil – two Brazilian oil companies deeply mired in the country’s wide-ranging Operation Car Wash graft scandal. Keppel O&M is the world’s biggest builder of oil rigs.
A series of corporate scandals in Singapore have put the pressure on Prime Minister Lee Hsien Loong. Photo: AFP
The US$55 million topped the nearly US$19 million in bribes that were involved at a scandal at state-linked shipbuilder Singapore Technologies Marine, making it the biggest corruption case to hit one of the so-called Singapore Inc companies linked to state sovereign wealth firm Temasek Holdings.
The case – which culminated this year with seven people including the company’s former president being jailed – had already raised worries over whether the Lion City was slipping in its intolerance for graft.
The country’s squeaky clean image, buttressed by its high rankings in international anti-corruption indices, had already taken a beating when Prime Minister Lee Hsien Loong in July was forced to emphatically refute allegations of nepotism and abuse of power levelled by his own siblings.
Local political observer Eugene Tan said the latest case raised “serious questions about the Singapore corporate sector’s commitment to anti-corruption and ethical business dealings.”
“Given the scale and the length of illicit dealings, it raises legitimate questions of corporate governance, board leadership and stewardship,” said Tan, a law professor at the Singapore Management University.
Lee Boon Yang Photo: AFP
“The scandal caps a year where Singapore’s branding, reputation and integrity have been negatively impacted. 2017 has been Singapore’s annus horribilis.”
Online, questions were swirling over contradictory statements Keppel O&M had made on its involvement in the scandal. When reports of the probe first broke in 2016, Keppel O&M denied any of its executives authorised bribes paid by its Brazilian agent Zwi Skornicki.
But in its statement following the December 22 settlement, the company acknowledged the US justice department findings that the corrupt payments were “made with knowledge or approval” of former executives.
Also under scrutiny were court documents that showed the settlement was reached after one of Keppel O&M’s lawyers cut a deal with the justice department and cooperated with investigations.
The case was resolved without trial because Keppel O&M agreed to enter into a deferred prosecution settlement, while its US subsidiary pleaded guilty to conspiring to violate the US Foreign Corrupt Practices Act.
Singapore’s attorney general’s chambers and anti corruption agency said the settlement was part of a “global resolution”, and that local authorities had served the company a “conditional warning” in lieu of prosecution given the substantial cooperation it had rendered during investigations. Investigations into individuals involved in the case “are ongoing,” the two agencies said in a statement.
Pritam Singh, one of six lawmakers from the opposition Workers’ Party in the 89-seat legislature, said on Facebook that he was “most surprised” the two agencies did not provide “any substantive information on this scandal” apart from its media statement.
The opposition party was planning to quiz Lee and finance minister Heng Swee Keat when parliament next sits on January 8, Singh wrote on Friday, describing the development as “what must be one of the largest corruption scandals in the history of Singapore’s government linked companies”.
Elsewhere, political blogger Andrew Loh said questions remained on why the company’s top brass – including its chairman Lee Boon Yang – were not aware of the extent of the graft.
Lee is a former cabinet minister and concurrently holds the chairmanship of Singapore Press Holdings, the publisher of The Straits Times newspaper.
The court documents said the bribes were paid between 2001 and 2014. Lee Boon Yang took over as chairman in 2009. His predecessor, Lim Chee Onn, also a former minister, helmed the company from 2000 to 2008.
Lim Chee Onn Photo: AFP
“If the chairman and CEO and the board did not know, then they must be grossly incompetent,” Loh wrote.
Jeffrey Chow, the former Keppel lawyer who pleaded guilty, had reportedly said in his plea hearing that he became aware of the graft when he drafted contracts with a company agent who was being overpaid by millions of dollars.
“I should have refused to draft the contract that we used for paying bribes and I should have resigned from Keppel,” Chow said, according to a Reuters report quoting court transcripts.
The deferred prosecution agreement published on the US justice department website said Keppel O&M received “full credit for its substantial cooperation” into the investigations.
Among other things, seven employees implicated in the saga were “separated” from the company, and it imposed some US$8.9 million in “financial sanctions” on 12 former or current employees, the documents said. The US$422 million settlement will be distributed between the US, Brazil and Singapore.
A Keppel O&M spokesman told This Week in Asia the company was “deeply disappointed” by the saga, and had taken steps to make sure it would not happen again.
Still, it will take time for Lion City to restore its pristine international reputation left tarnished by 2017, observers say. “Keppel’s conduct smears the Singapore brand and suggests Singapore is not exceptional at all. It owes Singaporeans an apology,” said Tan, the law professor.
Source: South China Morning Post
"GOOD GOVERNANCE" INDEED! THUMBS UP!
Keppel Corp’s ‘good governance’ includes concealing information from shareholders, sanctioning 17 nameless current and former employees
As the PAP continues to prevent further embarrassment to its elites, governance at Keppel Corporation has now turned into a joke.
On 30 December, KepCorp’s O & M unit reported that 17 current and former employees have been sanctioned over the Brazil bribery case. CNA
Or perhaps fewer employees were engaged in criminal acts over 13 years which resulted in the record US$422 million fine for a GLC? TNP
Investigations must have been ongoing for months but were only disclosed yesterday.
As a subsidiary of public-listed KepCorp, the government-linked company appears to have no shareholders to answer to.
Keppel: “For legal reasons, Keppel is unable to comment on any individual employee, or the specific penalties imposed against individuals.”
The truth: 2 of its employees involved happened to be former KOM CEOs. They are: 1. Choo Chiau Beng, also former Keppel Corp CEO 2. Chow Yew Yuen
A record criminal fine has been paid by Keppel and part of this will be borne by taxpayers. KepCorp should come clean by disclosing the names of all involved and action taken against each employee.
It’s a totally ridiculous situation where a public-listed GLC could suka suka conceal information belonging in the public domain.
Are Singaporeans so stupid to believe that imposing sanctions on nameless employees in the biggest GLC bribery case is good corporate governance?
https://likedatosocanmeh.wordpress.com/2017/12/31/keppel-corps-good-governance-includes-concealing-information-from-shareholders-sanctioning-17-nameless-current-and-former-employees/
Excuse me, but when was SG ever clean? LOL
Oxley Lee would do well now to seek advice from Jib Kor; after all he managed to magically sweep 1MDB entirely under the carpet and even boost his popularity ratings thereafter, in the meanwhile also plotting to shush up Mahathir and Anwar.
The perception that Singapore is"clean" and it being truly clean are two separate things, the disparity between them is getting more obvious after ah gong's departure.
LMFAO............will Pinky Lee sue SCMP till its pants drop for insinuating the People's Adultery Party is now less honourable?
In any case its time for them to go shopping for bigger sturdier closets at IKEA, the ones they have at the moment are not going to able to contain the skeletons any much longer from what I gather.
Lee Boon Yang was a fucking vet, what did you expect????