Vantage Drilling Signs $5 Million FCPA Settlement Linked to Petrobras Probe
21 November 2018 - 6:24AM
Dow Jones News
By Samuel Rubenfeld
Offshore oil rig operator Vantage Drilling International agreed
to disgorge $5 million in a settlement with U.S. regulators related
to a corruption probe in Brazil involving Petrobras.
Vantage Drilling, based in the Cayman Islands, settled with the
U.S. Securities and Exchange Commission over accounting-control
deficiencies at its predecessor company that violated the Foreign
Corrupt Practices Act. The company neither admitted nor denied the
SEC's findings, and it said the Justice Department closed a related
investigation in 2017 without filing charges.
"We are very pleased with the closure of the U.S. government's
investigation into possible violations of the FCPA," Ihab Toma, the
company's chief executive, said in a statement. "Vantage has been,
and remains, firmly committed to conducting its operations in
compliance with all applicable laws and regulations, including the
FCPA."
The case arose from allegations of improper payments made in
2009 and 2010 by a former Vantage Drilling Co. director to former
officials at Brazilian state-run oil firm PetrĂ³leo Brasileiro SA,
or Petrobras, relating to the contracting of a drillship. Petrobras
canceled the contract on Aug. 31, 2015, according to the SEC. The
companies are in a continuing dispute over a $622 million
arbitration award granted to Vantage, which was related to the
cancellation.
Vantage emerged from bankruptcy in 2016 as a private company;
the cancellation of the Petrobras contract played a role in its
bankruptcy filing. It first disclosed its role in the Petrobras
probe to U.S. authorities in 2015.
The company failed to devise a system of internal accounting
controls regarding its former director, and failed to implement
internal controls relating to its use of third-party marketing
agents, the SEC said. "These violations occurred against a backdrop
where [Vantage] had an ineffective anticorruption compliance
program," the SEC said in an administrative finding.
Petrobras in September agreed to pay $853.2 million to U.S. and
Brazilian authorities to resolve yearslong investigations into one
of the biggest corruption schemes ever uncovered. The corruption
scandal at Petrobras erupted in 2014 and has loomed over that
country ever since, leading to prison sentences for several
executives and a former president.
The SEC credited Vantage with providing cooperation over the
course of its investigation, and the company, among other things,
reconstituted its board of directors, named a completely new
management team and revamped its compliance program.
Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com
(END) Dow Jones Newswires
November 20, 2018 14:09 ET (19:09 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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