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Keppel O&M unit served summons in new law suit by EIG

Business Times
14 Feb 2018
Tan Hwee Hwee

Keppel Corporation's offshore and marine (O&M) unit has been served with a summons in a new law suit filed by EIG Global Energy Partners and some of its managed funds in the United States.

The conglomerate maintained in a disclosure about the summons and the law suit after Tuesday's trading close, that "the reported cause of action is without merit" and that its O&M unit "will vigorously defend itself".

An article published on Feb 8 on the Law360 website said that the EIG funds had launched a US$660 million racketeering suit in New York's federal court against Keppel O&M (KOM) pursuant to the Racketeer Influenced and Corrupt Organizations Act (RICO).

The civil suit concerns KOM's role in a Brazilian bribery scheme connected to a failed drill ship venture, for which Keppel recently reached a US$422 million settlement between KOM and the prosecutors in the US, the article said.

In 2016, Keppel Corp, KOM, Sembcorp Marine and Jurong Shipyard were added as defendants along with other shipyards and entities in the lawsuit filed by EIG and its eight managed funds with a district court in the US.

EIG had alleged in the 2016 law suit that it was misled by Petrobras, along with other named yards and entities to invest over US$221 million of equity in Sete Brasil, a rig-building business unit of Petrobras.

Sete Brasil went on to award rig-building contracts valued at about US$10 billion to business units of KOM and SembMarine.

The US District Court, District of Columbia, subsequently ruled in 2017 in favour of Keppel Corp, KOM, SembMarine and Jurong Shipyard and dismissed the law suit filed by the EIG funds.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.