Ranhill, Petronas and Keppel implicated in Unaoil's "bribery scandal"?

"Asian companies such as Hyundai, Samsung, Sinopec and Petronas are household names. But they have dark secrets. In the latest in Fairfax Media and The Huffington Post’s global bribery expose, these firms and more are implicated for paying kickbacks, money laundering and corruption."


The start of part 3 "Unaoil: Dark secrets of Asian powers" of "World's Biggest Bribery Scandal"



The Asian powers mentioned are three companies of Korea (Samsung, Hyundai and ISU) and the following players:

Some snippets containing specifics:


Leaked emails reveal that Unaoil agreed to pay millions of dollars to a Malaysian middle man who claimed he could influence a top Petronas’ executive and other Malaysian officials in 2010. “I’ll make [an] arrangement for us to see Mr [Petronas executive] when I’m in Dubai,” middle man Affandi Yusuf wrote to Unaoil.

“As you are aware the situation is very sensitive at the moment. I’ll have to meet Mr [Petronas executive] personally to make him comfortable to meet up with your team.”

In a later email from Affandi, the middleman claims that, in return for the bribes, his corrupt Petronas contacts had “fed us” inside information from a tender committee. This ensured that Unaoil’s client Petrofac qualified for a large contract.



In Libya, Malaysian company Ranhill offered Unaoil $40 million to convince senior Libyan officials to award it a large housing construction contract. The leaked emails reveal Ranhill approached Unaoil after former Malaysian prime minister Mahathir Mohamad had failed to convince Colonel Gaddafi to help.

Unaoil succeeded where Mahathir had failed. Unaoil paid a high ranking Libyan official, Mustafa Zarti, to assist Ranhill. The leaked files also suggest Unaoil promised a $200,000 personal kickback to a Ranhill executive if he helped Unaoil extract large commissions from the Malaysian company.

Unaoil also paid up to $2 million (along with further payments for a rug and a collection of fine wines) into offshore accounts to two mysterious Algerian middle men, Tewfic Guerbato and Omar Habour. It appears these payments were made to increase Unaoil’s influence inside Petronas and other Asian firms.



A confidential 2007 Unaoil memo details its plans to help Keppel win offshore oil rig and barge contracts on the massive Kashagan oil field. Unaoil regarded Keppel as an ideal client because Keppel had lax anti-corruption controls compared with Unaoil’s other multinational clients. Unaoil also believed Keppel had its own connections to allegedly corrupt Kazakh government officials.

“In my opinion we have a lot at stake here, apart from the $30m [in fees from Keppel] – we could set-up a long term association with these guys [Keppel].... The problems of working with a US or European outfit do not apply here,” a Unaoil executive wrote in a 2007 memo.

The leaked emails provide specific details of just how helpful Unaoil was to Keppel. In 2006, when Keppel was competing with French multinational Technip to win a contract to build an offshore oil rig in Kazakhstan, Unaoil used a corrupt contact codenamed “small D” to leak inside information on bidding strategy.

Stolen info SBM Offshore about alleged $ 250 million fraud (2)

KiniBiz picked up on the story on SBM Offshore and MISC (most likely after having read the story on this blog, although no source was mentioned) in their article:

"MISC named in global O&G bribery scandal"

KiniBiz asked for comments from MISC, which they could not give on time for that article.

However, today MISC has answered, in KiniBiz's article:

"Petronas’ MISC denies knowledge of bribery"

"At this point in time, we do not have any further information on the matter other than allegations that were made in Wikipedia and media releases made by SBM Offshore pertaining to the matter on Feb 7 and 10, 2014,” said the Petronas subsidiary in response to KiniBiz queries.


We have to wait for further information from SBM Offshore's side. Things have been going pretty slow there, the first allegations about possible bribery where reported in 2012.

From Reuters:

"It later disclosed it might have violated anti-corruption laws and could be subject to criminal investigation for alleged payments of bribes to officials in African countries. SBM Offshore has also said the investigation centres around potentially improper sales practices in two countries in Africa, and in one other country outside Africa, but said it was not possible to give more information or an estimate of the potential outcome."

This is the kind of language normally used when it looks like bribery did indeed happen. But what changed since last Friday is that the scale might be (much) bigger than initially feared, and that (some of) the management were aware of the bribery.

The COO was dismissed in 2013, in a rather "mysterious" announcement not mentioning the reason, but declaring that it was "not related to the operational performance of the projects in hand". The internet allegations did mention many times a person with the initials "JPL", which are the same as those of the COO.

Analysts now count on a possible very large fine for SBM Offshore, in the tune of RM 1 Billion to RM 2 Billion. Those amounts are peanuts for companies like JP Morgan, but not for SBM Offshore, who might want to use a rights issue to strengthen their balance sheet. Not sure though if the shareholders are too happy to draw their chequebook to pay for fines.

Bina Puri admitted its intention to secure contracts by paying bribes (2)

It seems that the Malaysian mainstream news providers have not yet picked up on the story, but in Singapore they did.

From the Singapore Law Watch website, source Straits Times, written by K.C. Vijayan (bold emphasis is mine):

Firm fails to collect $4.6m from client

A Singapore firm's court bid to collect a $4.6 million commission from a client failed after the judge found the deal had been tainted by intentions of graft.

The High Court found that Singapore-based ANC Holdings and Kuala Lumpur-based Bina Puri Holdings had intended to pay bribes to third parties in Saudi Arabia in order to secure two construction contracts worth $93 million.

The intention to bribe, which appeared to have been factored into the commission amount to be paid to ANC, effectively nullified the contract for ANC to help Bina secure the Saudi projects in return for the commission.

The judge made it clear the court was duty-bound to take into account evidence of illegal action and declined to uphold the contract on such grounds.

Judicial Commissioner Vinodh Coomaraswamy, in his judgment grounds released yesterday, said there was no finding that bribes were actually paid to secure the projects. "I cannot and do not make any findings as to whether bribery actually took place. I am in no position to do so," he said.

However, "it is a serious thing to admit an intention to secure contracts by paying bribes. It is especially serious - legally and reputationally - for a public listed company to do so", he added.

Bina Puri Holdings is listed on the Kuala Lumpur bourse and deals in construction and property development, among other things. ANC had contracted to help its subsidiary in Saudi Arabia secure the housing projects, which Bina Puri Saudi won in January 2011. But the Saudi housing authorities cancelled the contracts three months later, after Bina Puri Saudi failed to pay performance guarantee deposits worth 5 per cent of the projects' value.

ANC then sued Bina for its 5 per cent commission on the grounds that it had effectively secured the job for the Malaysian company. ANC's lawyer P. Ashokan argued it had alerted Bina to the pro-jects in Saudi Arabia and advised Bina's Saudi subsidiary on how to price its bids, making ANC the effective cause through which Bina got the contracts.

But Bina's lawyer Chia Foon Yeow countered that the firm had known of the projects independently and the successful pricing had been worked out with a Saudi contractor without ANC's help.

Judicial Commissioner Vinodh agreed that the evidence did not favour ANC's claim of having provided material assistance. But it was the allegations of bribery that finally unpicked the case.

The claims were triggered at first by Mr Chia's examination of an ANC witness which Mr Ashokan objected to. But in his own questioning of Bina's witnesses, it emerged, among other things, that some of the commission was meant for use as bribe payments with Bina's knowledge.

ANC's witnesses claimed the payouts to persons in Saudi Arabia were for market intelligence on relevant issues such as pricing strategy.

The judge discounted the claims, noting that 60 per cent of the $4.6 million commission was to go to Saudi third parties. He noted the commission in the agreement was 2.5 times the 2 per cent sum reasonably expected for such tender projects. "And this serves to reinforce my belief that the common intention from the outset was for (ANC) to use bribery to ensure Bina Puri Saudi secured the projects."

The judge dismissed the case and ordered both parties to bear their own costs.


Bina Puri did make today an announcement to Bursa Malaysia. Not about the High Court findings in Singapore nor about the intention to bribe which it admitted, but about a huge (30%) private placement which will very much dilute its existing shareholders. And that while a previous private placement had just taken place.

Bina Puri's accounts over 2012 were not qualified, but there was an "Emphasis of Matter" regarding the amount of RM 17 million owing by an associate which has been long outstanding, which is a clear red flag.

Bina Puri is allegedly linked to Syed Mokhtar. However, the following quote is from his biography:

He also answered the issue of the shareholding structure of his companies that could not be traced to him, acknowledging “it is an old habit that has to change.”

Where is Ze Moola has written several articles about Bina Puri.

Bina Puri admitted its intention to secure contracts by paying bribes

It is not often that a listed company admits being involved with bribery, but Bina Puri Holdings Bhd seems to have done exactly that.

In a court case in Singapore between ANC Holdings (plaintiff) and Bina Puri (defendant) a sum of S$ 4.6 million (more than RM 11 million) was claimed being 5% of the total value of a project in Saudi Arabia. The plaintiff claimed it fulfilled its obligations.

I recommend the readers to read the whole document. The word "bribe" is mentioned 82 times.

"The defendant's witnesses gave evidence that it had been the joint intention of both the plaintiff and the defendant in entering the agreement that the plaintiff's assistance to the defendant's subsidiary would consist of paying bribes to secure the projects."

" ..... it is a serious thing to admit an intention to secure contracts by paying bribes. It is especially serious - legally and reputationally - for a public listed company to do to." (page 72)

"I am satisfied that the parties' common intention in entering into the Agreement was that the plaintiff would procure the Projects for Bina Puri Saudi by paying bribes."

"... the result is that the plaintiff cannot enforce any claim under the agreement."

"I therefore dismiss the plaintiff's claim."

"I decline to award the defendant any cost in the present action. When the parties are in pari delicto - as they are here - the parties' losses lie where they fall." (in pari delicto: in equal fault)

Bina Puri has just filed its annual audited accounts 2012. The following paragraphs deal with the above court case, without mentioning about the bribes:

It will be interesting to see how the top management of the company will deal with the above case. Will the Malaysian authorities take any action?