Another major corruption case is unfolding in Norway, involving what may be the largest amounts of alleged bribes ever paid by a Norwegian company. Raids on various offices of offshore oil rig company Sevan Drilling have resulted in charges filed against Sevan Drilling and at least one of its founders, Arne Smedal, who also founded Sevan Marine.
Newspaper Dagens Næringsliv (DN) reported Monday that Smedal confirmed he’s been charged. He called the information that’s emerged from even Sevan Marine’s own investigation “completely shocking,” but that he does not believe he has done anything wrong himself.
“No, not in any way,” Smedal told DN. “This is tragic.”
Officials from Norway’s white-collar crime unit Økokrim, backed by local police, arrived at Smedal’s office in the southern coastal city of Arendal early Friday morning. Teams from Økokrim and the police also raided Sevan offices in Oslo and elsewhere around Norway to seize documents and other potential evidence in the case that involves billion-dollar contracts between Sevan and the Brazilian oil company Petrobras, which already is under a cloud of corruption charges in its home country.
Long day at the police station
Smedal was taken in for questioning and spent all day at the police station in Arendal, reported DN. According to Økokrim, Sevan Marine and Sevan Drilling are suspected of having paid the equivalent of several tens of millions of Norwegian kroner in bribes in order to secure contracts from Petrobras for some of its rigs.
Sevan Marine had itself hired law firm Selmer to conduct an investigation into the firm’s dealings with Petrobras, after Brazilian media had tied Sevan to the corruption scandal around Petrobras. Sevan delivered the results of that report to the authorities last week and announced itself on Friday that it had concluded it was “more likely than not, that illegal conduct in the form of improper payments to obtain business had occurred when Petrobras awarded contracts to Sevan.” Most of the questionable payments were made through a Brazilian agent now accused of taking bribes. The alleged bribes date back to the years 2005-2008 and involved the rigs Sevan Piranema, Sevan Driller and Sevan Brasil.
Sevan Marine underwent a major restructuring to avoid bankruptcy in 2011, spun off its drilling activities (now incorporated in Sevan Drilling) and sold off its huge floating production storage and offloading units (FPSOs). The investigation noted that payments made to agents “came to an end,” Sevan got a new shareholder structure, board and management and is today a technology and engineering company “with a changed business strategy.” Those involved in making the payments to agents that now are believed to have been bribes have since left the company.
That doesn’t apparently let Smedal off the hook as a founder of the company along with Jan Erik Tverteraas, who also has been called in for questioning in the case, and Kåre Syvertsen, who declined comment but told local newspaper Agderposten that he was surprised by the developments in the case. The suspected bribes were allegedly paid through Brazilian agent Raul Schmidt Felippe Junior, who worked with Smedal, Tverteraas and Syvertsen from the time they established Sevan in 2001. DN reported that Felippe Junior has denied accusations made against him in Brazil.
Erling Lind, an attorney at Oslo law firm Wiersholm who currently serves as chairman of Sevan Drilling, told DN that “everyone uses agents in Brazil” and he characterized Felippe Junior as a “real agent.” Commissions paid to him were at the market level, Lind told DN, and when Sevan was taken over by Seadrill four years ago, Seadrill’s own examination of the company revealed no irregularities. They were first reported in Brazil last summer, and Lind said that all payments to agents were immediately halted.
Some of the biggest names in Norwegian business have been connected to Sevan in recent years, including industrialist Jens Ulltveit-Moe, who served as chairman in 2011 and worked for months on the restructuring that ensured the company’s survival. Shipowner and offshore tycoon John Fredriksen came in as a major owner of Sevan Drilling through his company Seadrill when it was spun off and it’s now being taken off the stock exchange. The alleged corruption at Sevan Drilling occurred several years before Fredriksen got involved with the company, which now faces a bigger corruption probe than those at other Norwegian companies that have run into trouble doing business abroad, like Statoil in Iran, Yara in Libya and Telenor, where another investigaton is still unfolding over its business activities through VimpelCom in Uzbekistan. Sevan Drilling confirmed Friday night that it had been charged with corruption.
Sevan Marine’s current board leader, Siri Hatlen, stated that the board “regretted” the findings of its own independent corporate investigation and had decided to hand it over to Økokrim, which acted on it with a week. Hatlen noted that as a stocklisted company, Sevan is “dependent on our reputation as a trustworthy business partner. Sevan practises no-tolerance for corruption and is dedicated to comply with all relevant laws and principles for proper business conduct.” She said Sevan, which currently is led by Carl Lieungh as chief executive, would “continue to cooperate with relevant authorities.”