Sunday, January 24, 2021

Pension funds sue oil giant Petrofac over bribery case

-

An oil services company listed on the London stock exchange is facing a multimillion-pound shareholder lawsuit after a senior executive pleaded guilty to corruption.

Lawyers for shareholders in Petrofac said this morning that they were “well progressed” on a legal claim against the company. It is understood that the claim could exceed £400 million and that the group of claimants include large UK and US pension funds.

The group legal action – which is being financed by a litigation funding company – comes after David Lufkin, the former global head of sales at Petrofac, pleaded guilty last week to offering corrupt payments in an attempt to secure contracts in Saudi Arabia worth $3.5 billion (£2.7 billion) and contracts in Iraq worth $730 million (£566 million).

Petrofac is among the largest oil services companies quoted on the London market. It employs around 12,750 people around the world, primarily in designing, building, operating and maintaining oil and gas facilities. It floated in 2005 and is run by Ayman Asfari, 60, a Syrian-born tycoon and Tory party donor.

On Thursday Petrofac shares fell by more than a quarter after the Serious Fraud Office said that Mr Lufkin, the former global head of sales, had admitted 11 charges of bribery in connection with its investigation into the company. Today in London the shares dropped a further 1 per cent, or 4p, to 389.90p.

This morning Innsworth, a litigation funding company, and the law firm Keystone said that they were analysing potential claims and putting together a group of shareholders to launch action against Petrofac.

They said that the shareholders would argue that they suffered substantial losses from Petrofac’s alleged involvement in bribery, corruption and money-laundering.

The shareholder group claims that Petrofac issued false and misleading statements as a result of the alleged fraud. It is also argued that the company failed to disclose material information regarding its compliance and corporate governance policies and business performance and prospects.

Sources familiar with the legal action said that the formal claim had not yet been issued at court but that the lawyers were “well progressed” towards doing so.

It is also understood that lawyers for the shareholders have been investigating bringing a claim for the past 18 months and that Mr Lufkin’s admission to the Serious Fraud Office convinced them to go ahead.

The claim is being funded by Innsworth, which is also behind a shareholder claim against Volkswagen over the emissions scandal and a group action against Tesco over an alleged accounting scandal. Matthew Reach, a commercial disputes specialist at Keystone, is leading the legal action.

Petrofac said that “a number of individuals and entities” were alleged to have acted together with Mr Lufkin, 51, but that none had been charged and that “no current board member” was alleged to have been involved.

The admission relates to bribes of more than $50 million that the group allegedly paid to influence the award of contracts in Iraq and Saudi Arabia, fraud investigators said.

Mr Asfari and the then chief operating officer of Petrofac, Marwan Chedid, were both arrested and questioned under caution in relation to the fraud investigation but later released without charge.

NEWSLETTER

Get our daily notification on the latest financial crimes news around the World

MUST READ

- Affiliate Products -

Advertisement
Advertisement

This Week

Enable Notifications    OK No thanks