Vantage Drilling: ‘Brazil agent in plea deal for alleged Petrobras bribes’
Thursday, August 6, 2015 at 12:09PM
Richard L. Cassin in Agents, Brazil, Hsin-Chi Su, Petrobras, Vantage Drilling

Images courtesy of Vantage Drilling CompanyThe fallout from the Petrobras corruption scandal in Brazil keeps growing. This week there's a new disclosure from Houston-based Vantage Drilling Company.

The drill ship operator said in an SEC filing Tuesday that an agent it used in Brazil "has entered into a plea arrangement with the Brazilian authorities in connection with the agent’s role in obtaining bribes on behalf of former Petrobras executives."

Vantage trades on the NYSE MKT (the Amex) under the symbol VTG.

Petrobras is Brazil's state-owned oil and gas giant.

Vantage said it didn't own the drill ship when the alleged bribery happened. But the owner then was Hsin-Chi Su, who later sold the vessel to Vantage and became a company director and major shareholder.

Vantage sued Su in 2012, alleging that he used fraud and misrepresentation to induce the company to buy his offshore drilling rigs and vessels. In exchange, Vantage issued 100 million shares of stock to Su's F3 Capital and granted him three seats on Vantage's board of directors.

Last year, Su counter-sued Vantage and some current and former directors and officers because of the company's claims.

In 2013, 23 shipping companies that Su owned directly or indirectly filed for Chapter 11 bankruptcy protection in Texas, Law360 said.

Vantage said Tuesday it has voluntarily contacted the SEC and the DOJ "to advise them of these recent developments" in Brazil. 

"We continue to investigate the matter, but as of now, our internal and independent investigations have found no evidence of wrongdoing by our employees or participation in any manner with the inappropriate acts alleged to have been conducted by the agent," Vantage said.

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Here's the full FCPA disclosure from Vantage Drilling Company's Form 10-Q filed with the SEC on August 4, 2015:

In July 2015, we became aware of media reports that our agent utilized in the contracting of the Titanium Explorer drillship has entered into a plea arrangement with the Brazilian authorities in connection with the agent’s role in obtaining bribes on behalf of former Petrobras executives. 

We have since confirmed that our agent, who has represented multiple international companies in their contracts with Petrobras, has entered into such discussions and provided evidence to the Brazilian authorities of an alleged bribery scheme between the former Petrobras executives and a former director of Vantage. The former director, Mr. Su, was the sole owner of the company that owned the Titanium Explorer at the time the alleged bribe was paid. 

We have not been contacted by any governmental authority in connection with these allegations. However, we voluntarily contacted the SEC and the Department of Justice (the “DOJ”) to advise them of these recent developments. We continue to investigate the matter, but as of now, our internal and independent investigations have found no evidence of wrongdoing by our employees or participation in any manner with the inappropriate acts alleged to have been conducted by the agent.

We cannot predict whether any governmental authority will seek to investigate this matter, or if a proceeding were opened, the scope or ultimate outcome of any such investigation. If the SEC or DOJ determines that we have violated the U.S. Foreign Corrupt Practices Act of 1977 (the "FCPA"), or if any governmental authority determines that we have violated applicable anti-bribery laws, they could seek civil and criminal sanctions, including monetary penalties, against us, as well as changes to our business practices and compliance programs, any of which could have a material adverse effect on our business and financial condition.

On August 21, 2012, we filed a lawsuit against Mr.  Su, a former member of our Board of Directors and the owner of F3 Capital, our largest shareholder, asserting breach of fiduciary duties, fraud, fraudulent inducement and negligent misrepresentation, and unjust enrichment based on Mr. Su’s conduct in his dealings with the Company both immediately prior to, and during his tenure as one of our directors.

On June 20, 2014, we received notice that Mr. Su had filed a countersuit against the Company and certain of the Company’s current and former officers and directors. The countersuit alleges fraud, breach of fiduciary duty, negligent misrepresentation, tortious interference with contract, and unjust enrichment and seeks indemnification from us with respect to the matters that are the basis of our lawsuit.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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