TechnipFMC takes $280m charge in bribery probe

TechnipFMC (market cap $10.8 billion) announced its 2018 results and included a charge for $280 million as a probable estimate to settle bribery allegations. The company had previously disclosed that it was co-operating with authorities in the US, Brazil and France. The allegations relate to contracts in Brazil, Equatorial Guinea, and Ghana.

The charge also covers contracts with Unaoil, which is a Monaco-based consultancy run by British nationals of Iranian descent. A number of well known companies including KBR are under investigation for using Unaoil executives as middle men in deals around the world. Rolls-Royce has already paid $800m in fines and SBM Offshore paid $238 million.

Officially the company has its head office in London but it also has corporate offices in Houston and Paris. It was formed from the merger of Technip and FMC Technologies in January 2017.

The bribery allegations relate to contracts awarded prior to the merger. Both Technip and FMC were being investigated by the Department of Justice regarding the Unaoil contracts. The projects in Brazil, Equatorial Guinea and Ghana were performed by Technip.

It should be noted that no formal settlement has yet been made and the final amount could be more than the $280 million included in the 2018 results.

Back in 2010, Technip paid $338 million to settle bribery allegations in Nigeria related to the Bonny Island LNG project. KBR was part of that consortium too, and paid a $402 million fine related to the project.

TechnipFMC’s 2018 results also included a $1.7 billion asset impairment charge for goodwill and other fixed assets.

https://www.businesswire.com/news/home/20190220005889/en/TechnipFMC-Announces-Fourth-Quarter-2018-Results

 

2 thoughts on “TechnipFMC takes $280m charge in bribery probe

  1. Ed Shagman

    How does a whole company be made to pay for possibly one or two people’s actions, without regard for the tens of thousands of employees that may possibly suffer an effect in the future? I am speculating that business seemed normal at the time it was conducted, and am left thinking that the fines, when paid, in effect have become the real “bribes” to stay in business, and that the receiver of the fine monies, to a certain degree, has become a type of rogue entity in and of itself, seemingly extorting monies from a multitude of companies that are basically trying to provide a living for its employees.

    Reply
    1. Andrew Jowett Post author

      While I agree some of the settlements seem extortionate, I’ve seen it from the other side. Many years ago, I worked for a company where we were the lowest bidder for a project in Nigeria. The customer awarded the contract to one of our competitors because the Nigerian exec at the competitor was also on the board of directors of the customer! So we lost work through no fault of ours. The competitor later settled bribery allegations with the DOJ on that very project.

      Reply

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