Brazilian Court Acquits Two Former Sembmarine Executives in Bribery Case

Two executives related to the former Sembcorp Marine’s (now renamed as Seatrium) operations in Brazil were acquitted last week in the long-running corruption, bribery, and money laundering case related to contracts the company won a decade ago from Brazilian offshore energy company Sete Brasil. The company and its then competitor Keppel Offshore were involved in a wide-reaching corruption case which has come to be known as Operacao Lava Jato (Operation Car Wash) in Brazil.

The case stems back to the competition to win contracts in 2012 from Sete. It has been alleged that consultants and the executives of the operation in Brazil, a subsidiary of the then Sembcorp Marine were involved in various schemes including money laundering and bribery to influence the awarding of the contracts. Sembcorp Marine won seven drillship contracts from Sete Brasil valued at $5.6 billion.

The case has been dogging the companies with settlements over contract disputes dating back to 2016. Sembcorp Marine has provided statements acknowledging the different investigations dating back to 2019 and the 2020 indictment of the two executives based on their personal actions.

The former president of Sembcorp Marine’s Brazilian subsidiary, Estaleiro Jurong Aracruz Ltda, Martin Cheah Kok Choon was indicted in 2020 on charges of money laundering and corruption. Martin Cheah had been terminated from the company in 2015.

The case centered around Guilherme Esteves de Jesus who acted as a business consultant to the then president of the company. He was also indicted in 2020 on charges of money laundering. Another court in Brazil had previously sentenced him to 19 years in jail for related charges of corruption.

The proposed merger between the former Sembcorp Marine and the reorganized Keppel O&M has now been completed on February 28, 2023. Keppel O&M is now a wholly-owned subsidiary of the former Sembcorp Marine. Shortly after, the former Sembcorp Marine announced that it had changed its name to Seatrium Limited. Seatrium is a combination of two words – ‘sea’ and ‘atrium’ – reflecting the company’s vision to become a global leader in providing innovative engineering solutions for the offshore, marine and energy industries.

Seatrium, which was formed through the acquisition of Keppel by Sembcorp Marine, reports on December 20 the Brazilian Federal Lower Court acquitted the two men of all the charges that had been brought against them personally related to the allegations of corruption. The charges were not against the company. They note in the announcement that the Brazilian Federal Prosecutors’ Office may appeal the court’s decision.

In March 2023, the Office of the Comptroller General of Brazil (CGU) published a notice in the official gazette informing of the ongoing investigation into the company’s subsidiary, Estaleiro Jurong Aracruz. Reports were that the investigation was later suspended but the case has continued to linger over the company. Singapore’s Corrupt Practices Investigation Bureau in June 2023 also started a new investigation which the company linked to the pre-2015 activities of Sembcorp Marine’s subsidiary in Brazil.

After the latest developments in Brazil, Seatrium writes, “The company cannot predict how the abovementioned decision by the Brazilian Federal Lower Court will impact the current investigations or allegations relating to Operation Car Wash.”

The company reiterates that it is fully cooperating with the Brazilian authorities and monitoring developments in the investigations. They also said that they do not condone and will not tolerate improper business conduct, but that the potential outcome of the investigations into Operation Car Wash is still uncertain.

Yangzijiang Shipbuilding

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