SINGAPORE: The Government’s intention is to move as “expeditiously as possible” on investigations relating to Keppel Offshore & Marine (Keppel O&M) and the Attorney-General's Chambers (AGC) has sought assistance for evidence from authorities in other jurisdictions, said Senior Minister of State for Finance and Law Indranee Rajah in Parliament on Monday (Jan 8).
Ms Indranee was responding to questions from Members of Parliament (MPs) about the international bribery scandal that has engulfed the rig-building unit of local conglomerate Keppel Corp.
For giving bribes of more than US$50 million over 13 years to officials in Brazil in exchange for business deals, Keppel O&M has been slapped with a staggering US$422 million (S$567 million) fine as part of a global resolution with authorities in three countries.
Court documents released by the US Justice Department on Dec 23 said that the company "knowingly and wilfully conspired” to pay bribes between 2001 to 2014 to win business deals with Brazilian oil firms Petrobas and Sete Brasil.
Given that the case involved several Brazil-based projects dating back to 2001, many evidences, including documents and witnesses, are located in different jurisdictions.
According to Ms Indranee, the AGC will need these evidence for its investigations and has sought assistance from foreign authorities.
“AGC has asked for certain information from them and some of its requests are still pending. AGC anticipates that further requests will have to be made as the investigations develop.”
The AGC is also working on a request for mutual legal assistance, revealed Ms Indranee. This is a procedure whereby one country formally seeks assistance from another to obtain or secure evidence for use in its own investigations and proceedings.
How quickly and to what extent these requests will be processed depend on the courts of the jurisdictions in which these requests are made, said Ms Indranee.
“Obviously the intention is to move as expeditiously as possible. However, as I have explained, not all aspects of the investigation are within our control,” she said, while adding that this is an “international case” involving several foreign investigating agencies.
“Only after the investigations are completed can the AGC properly assess the case and decide on the appropriate response. This is something for the Public Prosecutor to decide, independently.”
Investigations into individuals involved in the graft scandal are ongoing. Ms Indranee noted that local investigations were conducted on the same timeframe as the US and Brazilian investigations and date back to 2001 when the corrupt acts first took place.
While there is no agreement within the United States' Deferred Prosecution Agreement (DPA) that prevents the disclosure of individuals under investigation, it is “standard practice” in Singapore and many other jurisdictions to not identify individuals under criminal investigation.
“Individuals will be identified if and when charges are preferred in court.”
"ROBUST" GLOBAL RESOLUTION
Authorities in the US, Singapore and Brazil had worked together to "reach an agreed approach" for Keppel O&M's case, Ms Indranee said.
“There was no 'three-nation plea bargain agreement',” she said in response to a parliamentary question from Aljunied GRC MP Sylvia Lim.
“What happened was that each jurisdiction acted under its own domestic laws, but in coordination with the other two jurisdictions.”
As part of the global resolution, Keppel O&M entered into a DPA with the US Department of Justice.
Under which, it has to pay about US$105.6 million to the US. Brazil will receive US$211.1 million or 50 per cent of the total criminal penalty. Singapore will receive US$105.6 million or 25 per cent, according to US court documents.
In Singapore, Keppel O&M has committed to certain undertakings and will pay to the Government US$52.7 million within 90 days from the date of the conditional warning.
Another sum of US$52.7 million must be paid within three years from the date of the conditional warning, less any penalties paid to Brazilian authorities during this period.
Keppel O&M also struck a leniency agreement with Brazil’s Federal Public Ministry.
In Singapore, the public prosecutor directed the Corrupt Practices Investigation Bureau (CPIB) to administer a conditional warning on Keppel O&M.
Factors considered for this decision include how Keppel O&M had voluntarily reported its internal findings to the CPIB and AGC in September 2016 and cooperated with all 3 jurisdictions in the investigation and resolution process.
A conditional warning allows Singapore to impose conditions that are "closely aligned" with the terms of the DPA, said Ms Indranee.
This "aligned approach" allows for a "robust resolution" to the case, she added.
"The trilateral resolution requires Keppel O&M to pay a total of US$422 million. If Keppel O&M fails to pay the penalty, there will be consequences under US, Singapore and Brazilian law."
"Any penalty or claim that Keppel O&M might be subject to under Singapore law would be far less than what the company is now liable for under the coordinated resolution."
Given that Keppel O&M is also required to strengthen its internal controls, compliance and anti-corruption programmes under the DPA, Ms Indranee said the current resolution has achieved more than what could be done if the matter was proceeded solely on the Prevention of Corruption Act (PCA).
AUTHORITIES WILL INVESTIGATE WHETHER OR NOT COMPANY IS A GLC
Citing the 2014 corruption bust at Singapore Technologies Marine (ST Marine), Ms Indranee said that as long as there is “good reason to investigate, the authorities will do so whether or not the company is a government-linked company”.
For the case of ST Marine, at least S$24.9 million in bribes were falsely claimed as entertainment expenses and made to employees of ST Marine's customers in return for ship repair contracts. Seven former ST Marine executives were convicted last year for their part in the graft scandal.
In response to the parliamentary question from Aljunied GRC MP Pritam Singh about the role of the Government and Temasek Holdings in overseeing the conduct of GLCs oversees, Ms Indranee explained that the Government does not interfere in nor influence the business decisions or operations of Temasek and its portfolio companies.
Likewise, Temasek does not interfere in the business decisions or operations of its portfolio companies.
“These are the responsibilities of the respective companies’ boards and managements," Ms Indranee said.
“Temasek holds the boards of its portfolio companies responsible for running the companies honestly and competently. If the boards do not perform, Temasek can, collectively with other shareholders, change the board," she added.
State investment firm Temasek Holdings holds a 20.43 per cent stake in Keppel as of Aug 15, 2017.
EXPECT LOCAL FIRMS TO UPHOLD INTEGRITY STANDARDS WHILE OVERSEAS
Ms Indranee emphasised that Singapore does not condone or tolerate corruption.
While local firms will have to operate in varied kinds of environments overseas, they will have to do so "while keeping their systems clean" as well as complying fully with the laws of Singapore and the countries they operate in.
The Government "cannot be a global policeman”, said Ms Indranee.
Therefore, Singapore companies operating overseas will have to uphold their own standards of integrity.
"Singapore companies have to operate in all kinds of environments. But as a matter of principle, we expect that they must do so while keeping their systems clean, and complying with the laws of the countries where they operate."
"They must develop ways of operating which enable them to do this. They cannot lower their own standards of integrity, and they must not bring back to Singapore practices alien to the norms which we have established with such great effort here."
Ms Indranee said: "Incorruptibility is a foundational value for Singapore. We must keep Singapore clean."