KBR Subsidiary Finalizes Civil Settlement with UK Serious Fraud Office
February 16 2011 - 11:21AM
Business Wire
KBR (NYSE:KBR) today announced that its wholly-owned subsidiary,
M.W. Kellogg Limited (MWKL) reached civil settlement with the UK
Serious Fraud Office (SFO). The agreement was granted by the High
Court under the Proceeds of Crime Act 2002 and stems from KBR's
violations under the Foreign Corrupt Practices Act (FCPA) occurring
between 1994 and 2004, prior to KBR becoming an independent public
company in April 2007. The FCPA violations were previously settled
with the U.S. Department of Justice (DOJ) and Securities Exchange
Commission (SEC) in February 2009.
MWKL reported concerns to the SFO under the agency’s
self-referral scheme and fully cooperated with the subsequent
investigation. The SFO recognized that while the company did
benefit from funds acquired as a result of unlawful conduct, MWKL
took no part in criminal activity.
Under the terms of the civil settlement agreement, MWKL will pay
approximately US$11,238,886 (£7,000,028) within fourteen days in
full and final settlement of the case. The amount equals the share
of dividends payable from profits generated by contracts obtained
for work on the Bonny Island Project. The company will also pay the
costs of the investigation and has agreed to overhaul its internal
audit and control measures to ensure its compliance systems are in
accordance with UK law.
Under KBR’s indemnity agreement with Halliburton, 55 percent of
the total settlement costs will be reimbursed to KBR. KBR does not
anticipate a financial impact from the settlement as this liability
is either covered under KBR’s indemnity agreement with Halliburton
or was provisioned at the time of KBR’s purchase from JGC of its
44.94 percent interest in MWKL.
"This settlement was expected and closes out an unfortunate part
of KBR’s past. We have since moved forward, conducting our business
with transparency, accountability and discipline in our continued
efforts of being the global contractor of choice,” said William P.
Utt, KBR President, Chairman and CEO.
KBR is a global engineering, construction and services company
supporting the energy, hydrocarbon, government services, minerals,
civil infrastructure, power and industrial markets. For more
information, visit www.kbr.com.
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