Petrofac plummets after SFO warns about 'not cooperating' with bribery probe
Petrofac shares plunged to their lowest since 2009 after the Serious Fraud Office accused the oilfield services company of failing to co-operate properly with its investigation into bribery and money laundering allegations.
FTSE 250
19,391.30
17:09 19/04/24
FTSE 350
4,341.08
17:09 19/04/24
FTSE All-Share
4,296.41
17:08 19/04/24
Oil Equipment, Services & Distribution
4,928.34
16:30 11/04/24
Petrofac Ltd.
23.22p
16:40 19/04/24
Earlier this month, the SFO launched a criminal investigation into Petrofac, its subsidiaries and its employees over suspicions of bribery, corruption and money laundering in connection to its use of consultancy services from Monaco-based Unaoil, primarily in Kazakhstan between 2002 and 2009.
An internal investigation commissioned by the FTSE 250 company last summer with lawyers Freshfields Bruckhaus Deringer and forensic accountants at KPMG reported no evidence of misconduct but the SFO has informed Petrofac this month that it does not accept those findings.
In an announcement on Thursday, Petrofac said the SFO had said that it "does not consider the company to have cooperated with it", a term used in sentencing guidelines, and that the SFO would determine the outcome of its investigation and any prosecutions in due course.
Petrofac said it was committed to cooperating with the SFO's investigation and was devoting very significant resources in its current engagement with the SFO, including the creation of a new committee made up of finance director Alastair Cochran, chairman Rijnhard van Tets and another independent non-executive with the purpose of working with the SFO on the probe.
Chief operating officer Marwan Chedid has resigned from the board after being suspended from his role until further notice.
Chief executive Ayman Asfari, who like Chedid was arrested by the SFO and questioned under caution before being released without charge, will continue in his role but will not be involved in any matters connected to the investigation, "to ensure full separation of operational duties and the investigation", meaning he will have "no role or responsibilities for engaging with or liaising with agents and consultants".
Petrofac stressed that the actions taken "do not in any way seek to pre-judge the outcome of the SFO's investigation", with Van Tets addings that, "these decisions signal the board's determination to cooperate fully with the SFO and its investigation, whilst ensuring Petrofac continues to deliver for its clients."
Analyst George Salmon at Hargreaves Lansdown said that, quite aside from the potential fines stemming from the investigation itself, "the demands on management time as the investigation continues could well hold back a business which is only just recovering from the collapse in oil prices two year ago".
Unaoil has denied any wrongdoing and said it is the victim of a smear campaign by a commercial rival.