Keppel's Q4 results throws up questions over its O&M provisions

Shares in Keppel Corporation bucked the market trend on Friday (Jan 26) even after the conglomerate posted its first-ever quarterly loss on the back of S$619 million in graft fines and related costs.

Clearly investors have priced in the hefty fines that unit Keppel Offshore and Marine (KOM) agreed to pay over its Brazil graft payments.

But what of the group's offshore and marine (O&M) contract provisions?

In its fourth-quarter financial results announced last Thursday, Keppel Corp booked another S$81 million provision for losses made on its Sete Brasil rig-building projects. That is on top of a S$230 million provision it last extended to these projects in the fourth quarter of the 2015 financial year.

Almost six years after Sete Brasil awarded US$10 billion worth of contracts to KOM and Sembcorp Marine (SembMarine), the other Singapore O&M heavyweight, the delivery of these rigs is still contingent on the progress of Sete Brasil's ongoing financial restructuring.

So far, Keppel Corp has been reviewing its exposure to the Sete Brasil contracts on a quarterly basis because the situation with Sete Brasil, as chief executive Loh Chin Hua puts it, has been "fluid".

If that is indeed the case, why has it taken two years for Keppel Corp to disclose the widening of its Sete Brasil provision by another S$81 million?

Read the full original article at The Straits Times.

Philippines' Duterte sanctions corruption prober after bank records 'leak'

Philippine President Rodrigo Duterte punished an anti-graft prosecutor suspected of leaking his bank records on Monday (Jan 29) after an opposition politician had accused Duterte of corruption.

When he was still a presidential candidate Duterte was accused of unlawfully failing to disclose 211m pesos (US$4.1m) in secret bank accounts. The 2016 complaint was lodged with the Ombudsman, an anti-graft prosecutor.

Duterte has denied the allegation. On Monday his spokesman Harry Roque said the president's chief aide had suspended the deputy Ombudsman, Melchor Arthur Carandang, for three months.

The Ombudsman's office had no comment.

Carandang told a local television station last year that the Ombudsman had since 2016 been quietly investigating Duterte and his family's bank transactions.

The probe followed a complaint filed by Senator Antonio Trillanes, a Duterte critic.

Trillanes had alleged Duterte embezzled government funds and engaged in other illegal activities during his lengthy stint as mayor of the southern city of Davao before becoming president.

Read the full original article at Channel NewsAsia.

Graft penalty pushes Keppel into quarterly loss; full-year gain down 72%

The one-off financial penalty and related costs arising from the global resolution of the Keppel Offshore & Marine (Keppel O&M) corruption scandal in Brazil has pushed the larger Keppel group into its first quarterly loss since 2003 when it first started quarterly reporting of its results.

Keppel Corporation sank into the red, with a net loss of S$495.8 million for the three months to Dec 31 last year. It was a significant reversal from a net profit of S$143.1 million in the corresponding period a year earlier.

The plunge was largely the result of a S$619 million charge relating to Keppel O&M's cross-border settlement with criminal authorities in the United States, Brazil and Singapore over corrupt payments made by a former agent in Brazil.

This sum included Keppel O&M's US$422.2 million (S$567 million) in fines, together with related legal, accounting and forensics costs.

Keppel said in its announcement on Thursday that the weaker quarterly showing was also due to poorer operating results from its offshore and marine division, although this was partially offset by higher profits from Singapore property trading and fair-value gains from assets.

Revenue dropped 20.4 per cent to S$1.54 billion, as turnover fell across all divisions, except infrastructure.

Read the full original article at The Business Times.

The Vietnamese Communist Party’s corruption hunt

On Monday, Vietnam’s former transport minister Dinh La Thang was sentenced to 13 years in prison. Another prominent figure, Trinh Xuan Thanh, received a life sentence for “deliberate violation of state regulations on economic management”. It is first time in Vietnam’s recent political history that a high-profile Politburo member has been subject to this kind of punishment. After the relatively express trial, Vietnamese Communist Party Secretary General Nguyen Phu Trong announced a determination to continue targeting “spoiled elements” of the Party.

When Dinh La Thang – then Minister of Transport, head of the Vietnamese Communist Party in Ho Chi Minh City, and a member of the elite 19-member Politburo – was stripped of his positions in May 2017*, it was a sign that something serious was happening in Vietnamese politics. Thang’s case would not have attracted so much attention if not for his unusual career path and influence in the key industries of oil and banking.

More importantly, Thang's was not an isolated case. Some 20 more individuals linked to the oil and banking sector have also been sentenced, including Trinh Xuan Thanh, head of oil giant PetroVietnam, who was captured in Germany by an international intervention. Later, Phan Van Anh Vu “Vu Nhom”, a business tycoon, was seized in Singapore. Vietnam’s ties with Germany suffered following the alleged kidnapping of Thanh, yet the arrest of these once-powerful individuals, even at the cost of diplomatic relations, was a signal of serious purpose within the Vietnamese Communist Party.

While many in Vietnam welcome the crackdown on prevalent corruption, others see only the ripples of a fierce power game within the Party.

Read the full original article at The Interpreter.

Kebumen regent resigns after being named graft suspect

Kebumen Regent Mohammad Yahya Fuad has announced his resignation from his position after he was named a suspect in a case of alleged graft surrounding education agency and youth and sports agency projects in the regency.

Central Java Governor Ganjar Pranowo confirmed in Semarang on Wednesday that Yahya had informed him about his resignation.

“Pak Yahya phoned me on Monday after the Corruption Eradication Commission (KPK) named him a suspect,” he told journalists.

In October last year, the KPK launched a sting operation in its investigation into a case of alleged graft related to projects in the two agencies. Six people were named graft suspects following the investigation.

The suspects are Kebumen Legislative Council members Dian Lestari and Yudhy Tri Hartanto, Kebumen Tourism Agency civil servant Sigit Widodo, Kebumen administration regional secretary Andi Pandowo, the president director of general supplier Otosda Sukses Mandiri Abadi Group, Hartoyo, and businessman Basikun Suwandi.

Ganjar said deputy regent Yazid Mahfudz would serve as acting regent.

Read the full original article at The Jakarta Post.

Corruption claims put Guan Eng in troubled waters

Once seen as secure, Penang Chief Minister Lim Guan Eng now finds himself under relentless assault from political rivals who smell blood in the water.

A high-profile investigation by the Malaysian Anti-Corruption Commission (MACC) into the state’s controversial undersea tunnel project has provided parties such as Gerakan ample ammunition to target Lim and his administration.

The case has made headline after headline as more and more information trickles out from the investigation, even as Lim tried to dismiss the matter as a “political circus”.

Critically for Lim, the probe into the RM305 million reportedly paid for feasibility studies and detailed designs of the project come at a most inopportune time, just ahead of a general election that is no more than months away.

This will distract the DAP secretary-general at a time when he needs to lead his party’s defence of the state, which has become a hotbed of activity by Barisan Nasional (BN) parties eager to undo the losses of 2008 and 2013.

The case will only further sidetrack Lim, who is already facing a corruption trial over the purchase of his home in Penang, allegedly for below market price.

That is also not the end of his legal troubles as he also has two defamation cases involving Gerakan leaders that will only force him to spend precious time in court that he could otherwise use for stumping.

Another issue he must contend with is the undercurrent of discontent in PKR over seat allocations in the state as well as possible unhappiness that is said to be fomenting within his own party’s grassroots.

Read the full original article at YAHOO! News.


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