DOW JONES NEWSWIRES
A subsidiary of KBR Inc. (KBR) reached an $11.2 million civil
settlement with the U.K. Serious Fraud Office, after KBR pleaded
guilty to criminal charges for bribing Nigerian government
officials for a decade.
The engineering, construction and defense-services provider and
Halliburton Co. (HAL), which separated itself from KBR in 2007,
settled federal charges totaling $579 million with the U.S.
Department of Justice and the Securities and Exchange Commission in
early 2009.
That ended a long-running U.S. investigation into an elaborate
bribery scheme which helped KBR executives obtain more than $6
billion worth of construction contracts in Nigeria.
Under the terms of the agreement announced Wednesday with the
U.K. agency, KBR's M.W. Kellogg Ltd. 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 U.K. law.
KBR also stated that under its indemnity agreement with
Halliburton, 55% of the total settlement costs would be reimbursed
to KBR. KBR doesn't anticipate a financial impact from the
settlement as the liability was either covered under that pact or
was provisioned at the time of KBR's purchase of its interest in
M.W. Kellogg.
"This settlement was expected and closes out an unfortunate part
of KBR's past," said Chairman and Chief Executive William P. Utt.
He added the company has since conducted its business with
transparency.
According to the U.S. Justice Department, KBR was part of a
four-company joint venture that received the contracts. As part of
its plea in the U.S., the company admitted to conspiring with those
partners to promise and pay bribes. They also admitted to paying
tens of millions of dollars in consulting fees to two agents for
use in bribing government officials.
KBR shares were up 2% to $34.30 in recent trading.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com