Petrofac, U.K. Fraud Cops Fight Over Fine After Bribery Plea
(Bloomberg) -- U.K. prosecutors said Petrofac Ltd. should face a 154 million pound ($209 million) financial penalty for pleading guilty to seven bribery offenses, about double what the company said it can afford at a London court hearing.
The company admitted on Thursday to seven counts of failing to prevent $44 million in bribes made to secure lucrative contracts in the Middle East between 2011 and 2017. Petrofac paid the bribes to secure $3.6 billion worth of contracts, Jonathan Kinnear, a lawyer for the Serious Fraud Office, said at Friday’s London court hearing.
Petrofac said it can raise between $90 million and $110 million for the financial penalty, its lawyer said. Ultimately a London judge will decide what Petrofac must pay at a court hearing on Monday.
Petrofac’s lawyer, Clare Montgomery, asked the judge to “step back” when deciding the penalty and said the company will need to carry out a refinancing exercise.
“I ask you impose something that represents proportionate justice,” she said.
The charges relate to former employees offering or making payments to agents in relation to projects in Iraq, Kingdom of Saudi Arabia and the United Arab Emirates. All employees involved in the charges have left the business.
Petrofac is one of the largest providers of services to oil and gas producers, helping plan, construct and operate facilities with a particular focus on the Middle East and North Africa. The share price of the London-based company has dramatically fallen since bribery allegations first emerged in 2016.
“This was a deeply regrettable period of Petrofac’s history,” the company’s chair, Rene Medori, said in a Sept. 24 statement. “We are committed to ensuring it will never happen again.”
A former senior executive at the company has also pleaded guilty to 14 counts of bribery. David Lufkin, a British national and former global head of sales at Petrofac’s international unit, was involved in making $81 million in bribes to secure $8.4 billion worth of contracts, Kinnear said. He will also be sentenced on Monday.
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