Dutch magazine Quote in its recent article alleges that the Company already knew in April 2012 of potential bribery in Brazil, that at that time, the Company’s Supervisory Board was advised of it, and that the Company withheld that information from investors for approximately two years.
These allegations are incorrect, and the Company strongly denies any suggestion that it has misled investors by withholding relevant information. Quote seems to equate payments to agents with (potential) bribes. This is ignoring the answers given to Quote’s questions to a member of the Company’s Supervisory Board which stress the difference between the two: see the relevant email, particularly Q&A 3.
As the Company noted in its press release of 2 April 2014, the internal investigation has been evidence based. It commenced in early 2012, when the Company learned from a third party that one of the Group’s agents may have given certain items of value to certain government officials in Equatorial Guinea. Initially the investigation focused on the activities of that agent in Equatorial Guinea and Angola. In parallel, the Company inventorised and stopped payments in all other countries, including Brazil.
Because in the course of the investigation red flags with respect to Brazil were identified, in the second part of 2013, a full investigation was launched with respect to Brazil. This was finalised early in 2014.
In its prospectus of 3 April 2013, the Company noted that “(i)n the course of the investigation allegations were made that improper payments were also made in countries outside Africa, but to date no conclusive proof of those allegations has been established.” The Company disclosed the fact that it was looking into a third country (besides Angola and Equatorial Guinea) in disclosures of 6 and 7 February 2014, and subsequently confirmed that the third country under review was Brazil. As the Company reported in its press release of 2 April 2014, the investigation into Brazil found certain red flags but the investigators did not find any credible evidence that the Company’s main agent in Brazil made improper payments to government officials (including state company employees) in Brazil.
In its half-year earnings report of 6 August 2014, the Company noted that it is discussing a potential settlement of the issues arising from the investigation, and in that context, announced it had recorded a non-recurring charge of US$240 million in the first half of 2014. The Company further noted that until the matter is concluded, SBM Offshore cannot provide further details regarding a possible resolution of the issues arising from the investigation, and that no assurance can be given that a settlement will actually be reached.
Contrary to a recent Quote report, the OM is conducting its own investigation. As noted earlier, the Company is fully cooperating with this investigation.
As always, the Company will inform the market as soon as further information can be provided.