Staggering that Keppel's board did not know of scandal

Singapore Democrats

The current boards of directors of Keppel Corporation and its unit Keppel Offshore & Marine (KOM) have denied knowledge of the bribes that were paid in Brazil.

If this is the case, then the entire board should resign for dereliction of duty because overseeing a company's executives and their activities is precisely what board directors are supposed to do.

It beggars belief that a corrupt practice conducted by top executives of KOM on such a scale, in such magnitude and over such a long period would go undetected by Keppel's boards.

The bribery, one of the biggest in the US history in terms of penalties imposed under the country's Foreign Corrupt Practices Act and certainly the biggest in Singapore's history, had even implicated Brazil's former president Lula da Silva and brought down Dilma Rousseff's presidency, leading the country to political chaos.

Even more significantly, the illegal payments went on for 14 years!

How all this happened with Keppel's boards of directors saying that they had no idea of what was happening can only point to one thing: incompetence.

Keppel Corporation's core values include: “Integrity: Act with ethics and honesty” and “Accountability: Responsible to all stakeholders”.

How can Keppel act responsibly and with accountability when it doesn't even know that a massive bribery scandal was taking place within its ranks for over a decade?

The ludicrousness of the situation calls for stern measures to be taken with the boards' members, starting with the resignation of the group's chairman and former PAP minister, Mr Lee Boon Yang.

As chairman, Mr Lee's responsibilities include “set[ting] guidelines on and monitor[ing] the flow of information from management to the Board to ensure that all material information is provided in a timely manner to the Board for the Board to make good decisions.”

In addition, he “takes a leading role in the Company’s drive to achieve and maintain a high standard of corporate governance...”

It is clear that Mr Lee has failed on both counts. If the chairman of a company can remain so ignorant of such a major development, then what good is he to the company?

As he accepted accolades for Keppel receiving the “best-managed board” in the Singapore Corporate Awards in 2015, saying: “We are encouraged by the recognition accorded to Keppel companies. In particular, we especially value the gold award for the best-managed board”, so must Mr Lee now plainly and fully accept the responsibility of the scandal.

He cannot take credit for praise (even when they are misplaced), and palm off criticism. 

Similarly, the CEO of Temasek, Ms Ho Ching, must answer for the debacle. Keppel is one of the main entities in Temasek's stable of government-linked companies. As such, her role in the debacle should not be overlooked.

The SDP calls on Mr Lee and Keppel's Board of Directors to give a full accounting of the entire episode instead of only making a terse response to media queries. Keppel Corporation's website is conspicuously silent on the matter.

At the minimum, the CPIB must launch an immediate and full investigation into the corruption scandal and bring those responsible to justice.

Saturday, 06 January 2018 SDP Print