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Ex-president of SembMarine unit charged in Brazil with money laundering, graft

Ex-president of SembMarine unit charged in Brazil with money laundering, graft

Source: Business Times
Article Date: 04 Feb 2020
Author: Ng Ren Jye

Charges against Martin Cheah Kok Choon relate to certain drilling rig contracts entered into by SembMarine units with Sete Brasil in 2012.

The former president of Sembcorp Marine's wholly-owned Brazilian subsidiary Estaleiro Jurong Aracruz (EJA), Martin Cheah Kok Choon, has been charged by the Public Prosecutor's Office in Brazil, Ministério Público Federal.

Cheah is accused of money laundering and corruption in connection with certain drilling rig construction contracts entered into by SembMarine subsidiaries with Sete Brasil in 2012.

Cheah's employment with the SembMarine group was terminated in June 2015.

Another individual, Guilherme Esteves de Jesus, was also charged with money laundering. Companies connected to him were engaged by SembMarine's subsidiaries as consultants in Brazil.

SembMarine said on Monday that all such consultancy contracts have been suspended and remain suspended indefinitely by the group.

The charges against the two men are in their personal capacities and not against SembMarine's subsidiary EJA, it noted.

In the light of these developments, SembMarine will be lodging a further suspicious transaction report with the Commercial Affairs Department (CAD) of the Singapore Police Force.

SembMarine lodged a suspicious transaction report in July 2019 with the CAD after revealing that its yard in the south-eastern state of Brazil was raided and that Cheah was involved in a corruption probe.

Other than Cheah, the company is not aware of any other employee past or present who is a subject of the ongoing investigations by the Brazilian authorities related to Operation Car Wash, said SembMarine.

Operation Car Wash is a major anti-corruption probe in Brazil which has implicated politicians and large Brazilian companies including state-owned oil company Petrobras.

Sete Brasil's only client was Petrobas and it failed to secure long-term financing from state development bank BNDES amid allegations of kickbacks. Petrobas has also dropped overall investments.

Following that, debt-ridden Sete Brasil filed for and obtained bankruptcy protection in 2016.

In October 2019, SembMarine reached settlement deals with Sete Brasil for drillship and rig-building contracts that were frozen after Sete Brasil filed for bankruptcy.

SembMarine had seven drillship contracts with Sete Brasil worth a total US$5.6 billion. Of this amount, it received S$2.7 billion from Sete Brasil before payments stopped in November 2014.

Under the settlement, the contracts would be terminated and the parties will mutually release each other from all claims in relation to the contracts, subject to certain conditions being fulfilled.

Shares of SembMarine closed down S$0.01, or 0.9 per cent, at S$1.15 on Monday.

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

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