(Bloomberg) -- Singaporean shipbuilders Keppel Fels Ltd. and Jurong Shipyard Pte. are sinking deeper into a graft scandal that has transfixed Brazil and buffeted local oil industry suppliers.
Keppel Fels and Jurong, a unit of Sembcorp Marine Ltd., were among a group of companies that allegedly paid bribes through intermediaries to win contracts to build 21 deep-water drilling vessels for about $800 million each, according to testimony released Friday by a Brazilian court. The contracts were awarded by Sete Brasil, a company set up by a group of Brazilian banks and Petrobras to build deep-water rigs and then lease them to the state-controlled oil producer.
Asked for comment, Sembcorp Marine referred to a February statement saying the company didn’t make any illegal payments and that its policies and contracts prohibit bribery and unethical behavior.
In an e-mailed response to Bloomberg News, Keppel Fels said it wanted to “strongly refute” allegations that it paid bribes. The company said its code of conduct forbids bribery and corruption and requires employees to comply with the law wherever they operate.
The unfolding scandal threatens to derail Brazil’s plans to develop a domestic industry to compete with established offshore vessel suppliers in China, South Korea and Norway as Petrobras invests billions of dollars in a bid to double output from giant oil fields deep in the Atlantic. Sete has faced loan delays from Brazil’s development bank during the investigation.
The allegations were made by Pedro Barusco, a former Petrobras and Sete director who has agreed to give up about $97 million he says he earned from bribes, including payments from shipyards to win work with Sete.
Shipyard payments were cited by police and a court overseeing the case when it issued the warrant to arrest Marcelo Odebrecht, the chief executive officer of engineering and construction group Odebrecht SA. Odebrecht has denied wrongdoing and a judge has yet to accept formal charges.
A consortium in which Kawasaki Heavy Industries Ltd. is a participant also was cited in the testimonies used by the judge. Kawasaki partnered with companies including Odebrecht in Estaleiro Enseada do Paraguacu, another shipyard that won contracts with Sete. The chief executive officers of Kawaski Heavy’s partners have been detained and questioned as part of the police investigations.
Kawasaki is collecting information on the issue, the company said in an e-mailed response to Bloomberg, adding that it’s surprised Odebrecht executives were detained.
Under the alleged scheme, which would have spanned more than a decade, political parties helped promote favored candidates to positions of influence inside the oil producer, formally known as Petroleo Brasileiro SA. These executives then allegedly charged bribes for contracts, with part of the proceeds allegedly being used to finance political campaigns.
Barusco said he collected bribes at Petrobras from 1997 until 2010 and continued the practice when he moved to Sete. He left Sete in 2013.
--With assistance from Kyunghee Park in Singapore and Kiyotaka Matsuda in Tokyo.
To contact the reporter on this story: Sabrina Valle in Rio de Janeiro at firstname.lastname@example.org. To contact the editors responsible for this story: James Attwood at email@example.com Michael S. Arnold, Anand Krishnamoorthy
Copyright 2016 Bloomberg News.
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