Vantage Drilling International, an offshore drilling company with its head office in the Galleria area, agreed to settle charges with the SEC. The charges concern the predecessor company, Vantage Drilling Company (‘VDC’) and relate to the Foreign Corrupt Practices Act (FCPA).
The SEC alleged that VDC failed to devise internal controls with regard to its transactions with Mr Hsin-Chi Su, a former outside director and largest shareholder and Hamylton Padilha, a third-party marketing agent.
In 2015 the Brazilian authorities charged Mr Su. Mr Padilha reached a plea deal. The charges arose out of the Lava Jato ‘Operation Carwash’ Petrobras bribery investigation. The Brazilian authorities alleged that they paid bribes in connection with obtaining an 8-year drilling contract in the Gulf of Mexico worth $1.8 billion. In July 2018, they also charged the company and former CEO Paul Bragg with corruption.
In 2007-2008 VDC acquired the rights to purchase the drilling assets of Mr Su. These included the Titanium Explorer, an ultra-deepwater drillship that was due to be completed in 2012. According to Brazilian prosecutors, in 2008, Mr Su agreed to pay $31 million in bribes to officials of Petrobras and the PMBD political party, out of his personal funds.
Mr Su had originally told Vantage that he needed $32 million to make an installment payment to the Korean shipyard building the drillship. The SEC alleged that the company later found out that the Korean shipyard had granted Mr Su an extension to make the payment. They argue that the company should have enhanced its internal controls as a result.
Mr Su had agreed to pay part of the $31 million to the Petrobras officials in three installments. Before he could make the last one, he ran out of funds. Mr Su could not continue financing the construction of the Titanium Explorer. VDC agreed to buy the drillship from him for $169 million in April 2012. VDC also forgave $33.6 million of debt that Mr Su owed the company.
In August 2015 Petrobras cancelled the drillship contract and VDC went into Chapter 11 in December. VDC has filed an international arbitration claim for wrongful termination and in July 2018 was awarded damages worth $622 million.