Singapore proposes deferred prosecutions in wake of ​Keppel unit’s $422 million US settlement

17 January 2018 8:43pm

16 January 2018. By Phoebe Seers.

In the aftermath of Keppel Offshore & Marine’s $422 million settlement with the US Department of Justice, which resulted in a “conditional warning” on the company’s home turf, Singapore has confirmed that the introduction of deferred prosecution agreements is among a slew of proposed changes to the Criminal Procedure Code expected to be put before parliament this year.

Although the details of the proposed DPA regime are not yet clear, law and home affairs minister K. Shanmugam told lawyers yesterday that the arrangement would be available only to corporate offenders and would be voluntary.

DPAs will contain statements of facts, expiry dates and any applicable financial penalties, and their terms will have to be approved by the High Court, according to a news report posted on the government’s website.

Singapore’s deputy public prosecutor, Kannan Gnanasihamani, told MLex last October that such arrangements were being considered.

Shanmugam yesterday said it was “about time” Singapore introduced DPAs, which had proved to be an invaluable tool in the US's fight against serious financial crime.

Criminal lawyers have welcomed the proposal. Shashi Nathan, a partner at Withers, said he could not see any drawbacks at all.

"The proposed DPA will give corporations the option of resolving any impending criminal prosecution early with a view to avoiding criminal liability or a criminal record," he said. "It is also unlikely that one will have a situation where one can buy justice."

The late-December admission of the Keppel Corp subsidiary to paying over $50 million in bribes to Brazilian officials, resulting in profits of more than $350 million from business obtained through corruption, sent shockwaves through Singapore.

The city-state prides itself on its ability to maintain a squeaky-clean reputation in a region where corruption is perceived to be rampant. The Keppel Offshore & Marine affair was one of the biggest corruption scandals in Singapore’s history — if not the biggest.

The case also marks the first instance of US authorities coordinating a resolution with their counterparts in Singapore under the US Foreign Corrupt Practices Act.

Keppel Corp is chaired by Lee Boon Yang, a former cabinet minister and parliamentarian from the ruling People’s Action Party who left politics in 2011. Lee is also chairman of Singapore Press Holdings, Asia’s largest media organization and the publisher of Singapore’s most widely read newspaper, the Straits Times.

State investment firm Temasek Holdings, which has a 20.43 percent shareholding in Keppel Corp, is headed by the Prime Minister’s wife, Ho Ching, who has been its chied executive since 2004.

Singapore's government has sought to address concerns that Keppel got off lightly.

"Any penalty or claim that [Keppel Offshore & Marine] might be subject to under Singapore law would be far less than what [it] is now liable for under the coordinated resolution," senior law minister Indranee Rajah told parliament last week.

The maximum fine under Singapore's Prevention of Corruption Act is S$100,000 (US$76,000) per charge, which "wouldn't get us anywhere near the penalty under the global resolution," she said.

Singaporean law currently allows for prosecutions of Singaporean individuals who commit corruption offences overseas, but not companies. In contrast, the US Foreign Corrupt Practices Act and the UK Bribery Act can be used to punish companies as well as individuals for overseas bribery.

The public prosecutor directed Singapore’s Corrupt Practices Investigation Bureau to administer a conditional warning for Keppel Offshore & Marine. That warning allows Singapore to impose conditions that are closely aligned with the terms of the American DPA; if any of those conditions are breached, the company can be prosecuted in Singapore.

Singapore authorities are conducting ongoing investigations of the roles played by individuals in the case.

- Additional reporting by Toh Han Shih

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