Mr Chua Kheng Wee Louis asked the Prime Minister regarding CPIB’s investigation into Seatrium and individuals from the company (a) what is the number of current and former employees of the company being investigated and whether they are based in Singapore; (b) whether the decision by Temasek Holdings to inject capital into then-Sembcorp Marine took into account the alleged corruption offences that occurred in Brazil; and (c) whether CPIB is working with the Comptroller General of Brazil on the preliminary administrative liability proceeding against the company’s subsidiary.
Ms Indranee Rajah: Mr Deputy Speaker, on 31 May 2023, the Corrupt Practices Investigation Bureau (CPIB) announced that it had, acting on information received, commenced investigations against Seatrium Limited and individuals from Seatrium Limited, for alleged corruption offences that occurred in Brazil. Seatrium Limited was previously known as Sembcorp Marine Limited, which merged with Keppel Offshore & Marine Limited (KOM) in February 2023.
As investigations are ongoing, it is not appropriate to provide further details at this juncture. CPIB will be interviewing various individuals of interest and reviewing all documentary and other records to which it can gain access. Other than CPIB, we understand that the Brazilian authorities are investigating Seatrium, but it would not be appropriate to provide any details or comments at this juncture.
CPIB takes this matter seriously. It will investigate the case thoroughly and seek to complete the investigations expeditiously.
Dr Tan asked about the assessed impact on Singapore’s reputation. As CPIB’s investigations are still ongoing, it would be premature to speculate on the outcome. Suffice to say, there is no change in Singapore’s zero-tolerance policy on corruption and our commitment to uphold the rule of law.
Mr Louis Chua asked whether the decision by Temasek to inject capital into then-Sembcorp Marine took into account the alleged corruption offences in Brazil.
Temasek became a direct shareholder of Sembcorp Marine in 2020, following the demerger of Sembcorp Marine from its then-parent, Sembcorp Industries. Temasek participated in Sembcorp Marine’s two rights issues in 2020 and 2021.
The Government understands that Temasek conducted the due diligence appropriate to the rights issues, bearing in mind that the company was already part of the group. This due diligence took into account Sembcorp Marine’s public disclosures that had already been made. The disclosure pertaining to the Brazilian case mentioned that there were charges by Brazilian authorities against an ex-employee in his personal capacity and not against Sembcorp Marine’s Brazilian subsidiary or the company. Sembcorp Marine Group also stated it was not aware of any other of its employees being subject to those investigations. All disclosures in the circulars and Offer Information Statement came with a representation by Sembcorp Marine’s board on the accuracy of information and that all material disclosures had been made.
Temasek’s investments in Sembcorp Marine pursuant to the rights issues, as well as those of all other investors, were based on the information provided in the shareholders’ circulars and Offer Information Statement.
In the Sembcorp Marine Group’s announcements on 3 July 2019, 8 July 2019, 3 February 2020 and 21 February 2020, it further stated that it was committed to the highest standards of compliance with anti-corruption laws and does not condone, has not condoned and will not tolerate any improper business conduct.
Based on the available facts and disclosures at that time, Temasek made an independent, commercial decision to inject capital into the company. The rights issues were raised during the pandemic to ensure that Sembcorp Marine had sufficient funding to see through its business obligations and complete existing projects, given the downturn of the industry which was exacerbated by COVID-19. Without the recapitalisation, there would potentially have been an erosion of value and a loss of jobs.
Mr Deputy Speaker: Mr Louis Chua.
Mr Chua Kheng Wee Louis (Sengkang): Thank you, Mr Deputy Speaker, just one supplementary question for Minister. I think in the interest of good stewardship and given that it is Singapore’s reputation at stake, how does the Ministry of Finance (MOF) and Temasek ensure that there are adequate anti-corruption and bribery controls that are put in place, that these are effectively enforced and Temasek, as a shareholder, has effective oversight over these risk mitigation strategies and controls?
Ms Indranee Rajah: I thank Mr Louis Chua for what is an important question. First, he had asked about MOF and Temasek. MOF and Government, as a whole, I think it is well-known that our position is that you have to have zero tolerance on corruption. We have got strong laws on that and do not hesitate to enforce if need be; and that obviously is communicated to all companies in which the Government either owns or, in fact, companies which the Government does not own. It is to the public at large.
With respect to Temasek, I think as they had mentioned before publicly, they do regular engagements with their portfolio companies. They, too, send a strong signal that corruption is not to be endorsed, encouraged or, in any way, acceptable. The thing, though, to remember about corruption is that, by its nature, it is done in secret. I mean, unless they are not very adept, nobody goes around actively publicising that you are doing a corrupt activity. Fraud and corruption, by their very nature, tends to be secret.
So, I think the key thing here is to continually review processes to see whether your processes are robust and enable something to be flushed out if need be. And even then, as we have seen in many other cases, it is not 100%.
So, the short answer is that we just need to continue to be active, vigilant, get the message out, and as Temasek has said, keep continuing its regular engagement with companies and setting the standards.
Prime Minister’s Office
3 July 2023
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=oral-answer-3261
Office of the Leader of the Opposition 