Two former executives of Singapore-based offshore giant Sembcorp Marine (now known as Seatrium) have been acquitted of a long-standing corruption, bribery and money laundering case in their Brazilian operations. The case relates to a contract won by former Sembcorp Marine from Brazilian offshore energy company Sete Brasil a decade ago. Former Sembcorp Marine and its then-rival Keppel Offshore were embroiled in a wide-ranging corruption case known in Brazil as "Operação l**a Jato".
It is understood that the case can be traced back to the competition to win the Sete Brasil contract in 2012. At that time, it was alleged that consultants and managers of the former Sembcorp Marine Brazil subsidiary were involved in various schemes such as money laundering and bribery aimed at influencing the award of contracts. As a result, the former Sembcorp Marine secured an order for seven US$5.6 billion drillships from Sete Brasil.
The case has long plagued the two companies, with the settlement of their contractual dispute dating back to 2016. The former Sembcorp Marine issued a statement saying it admitted to initiating a "discriminatory" investigation as early as 2019 and indicting the former executives in 2020 based on their personal conduct.
Martin Cheah Kok Choon, the former president of Sembcorp Marine's Brazilian subsidiary, Estaleiro Jurong Aracruz Ltda, was indicted in 2020 for money laundering and corruption charges, and Martin Cheah was fired from the company in 2015. At the heart of the case was Guilherme Esteves de Jesus, who had served as a business adviser to the company's then-president. In 2020, Guilherme Esteves de Jesus was convicted by a Brazilian Federal Court of Justice for bribery, money laundering and participation in a criminal organization, sentenced to 19 years and 4 months in prison and fined.
The proposed merger between the former Sembcorp Marine and the restructured Keppel O&M completed on 28 February 2023, and Keppel Offshore and Marine are now wholly-owned subsidiaries of the former Sembcorp Marine. Soon after, the former Sembcorp Marine announced that it had changed its name to Seatrium Limited. Seatrium is a combination of the words "SEA" and "Atrium", reflecting the company's vision to become a global leader in providing innovative engineering solutions to the offshore, marine and energy industries.
In a December 20 announcement, Seatrium said Brazil's Federal Lower Court had acquitted all individual charges against two former Sembcorp Marine executives in connection with corruption charges. The allegations are not against the company. In the announcement, Seatrium noted that the Brazilian Federal Prosecutor's Office may appeal the court's decision.
In March 2023, Brazil's General Office of National Audit (CGU) issued an announcement in the Official Gazette informing that an investigation was underway into Estaleiro Jurong Aracruz, a former Sembcorp Marine subsidiary. There are reports that the investigation was later halted, but the case continues to haunt the former Sembcorp Marine.
In June 2023, Singapore's Corrupt Practices Investigation Commission (CPIB) also opened a new investigation linking it to the pre-2015 operations of the former Sembcorp Marine Brazil subsidiary. In addition, in August 2023, Balakrishnan, a 61-year-old Malaysian citizen, was charged with corruption in court on August 16, as confirmed by the CPIB, and between 2015 and 2021, Balakrishnan was accused of corruption from nine contractors representing different companies for at least 20S$290,000.
In response to the latest developments in the "Operação l**a Jato" (Operation Car Wash), Seatrium argued: "The Company is unable to ** how the above decision of the Brazilian Federal Lower Court will affect the current investigations or allegations related to the Operation Car Wash." "The company reiterated that it is fully cooperating with the Brazilian authorities and is closely following the progress of the investigation. It also said that the company will not condone or tolerate unfair business practices, but the potential outcome of the investigation into Operation Car Wash remains uncertain.