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SFO investigation into Petrofac wider than previously known

Stock MarketsJun 21, 2021 09:05
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By Samuel Indyk – Shares in Petrofac (LON:PFC) were trading lower on Monday after a report said the investigation into the company by the UK’s Serious Fraud Office (SFO) may be wider than previously known publicly.

The Guardian reported that the body is investigating alleged million-pound payments made by Petrofac since the early 2000s to secure contracts in nine countries.

The SFO initially began its probe into Petrofac in 2017 but it was previously only known to investigating payments in Iraq, the UAE, and Saudi Arabia. The Guardian now says the body is looking into alleged payments relating to contracts in Kuwait, Algeria, Iran, Syria, Bahrain, and Kazakhstan.

One former executive, David Lufkin, has already pleaded guilty, admitting to working with employees to offer or pay bribes to win contracts in Saudi Arabia, Iraq and the UAE. Lufkin is scheduled to appear in court today.

Back in March, the company was suspended from competing for contracts by ADNOC in the UAE. ADNOC cited the ongoing probe into the company by he SFO.

A month later, alongside its annual results, Petrofac said the ongoing investigation was causing it “real and material” harm as it reported a pre-tax loss of $180mln.

The new CEO, Sami Iskander, was forced to suspend the company’s dividend for a second consecutive year but emphasised that neither the company itself nor any current board members were facing charges.

Responding to the Guardian article, a Petrofac spokesperson said: “Three years ago we confirmed that the SFO’s investigation into Petrofac had been, and would continue to be, wide-ranging in both time and scope, which is to be entirely expected; furthermore during our constructive engagement with the SFO in the last four years we recognise their stated approach to bring pace, and importantly focus, to their investigations as they progress, and we look forward to bringing this matter to closure as quickly as possible.”

At 09:01BST, shares in Petrofac were trading lower by 4.1% at 119.56 pence per share.

SFO investigation into Petrofac wider than previously known

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