Monday, August 22, 2005

Chicago Bridge & Iron Subpoenaed by SEC in FCPA Investigation of Halliburton

Chicago Bridge & Iron Co. N.V., a Dutch construction company, filed an 8-K that makes a terse disclosure that the company received an SEC subpoena as part of an Foreign Corrupt Practices Act investigation of possible bribery in connection with the construction of a liquefied natural gas (LNG) facility in Nigeria.  The company's entire release (here) states:

We were served with a subpoena for documents on August 15, 2005 by the Securities and Exchange Commission in connection with its investigation titled “In the Matter of Halliburton Company, File No. HO-9968” relating to an LNG construction project on Bonny Island, Nigeria, where we served as one of several subcontractors to a Halliburton affiliate. We are cooperating fully with such investigation.

The SEC commenced an investigation last year of possible bribery related to the project, which involved the Halliburton Company as one of the lead contractors, and Chicago Bridge was a subcontractor that received a $100 million contract.  In an update on the investigation issued on Sept. 1, 2004, Halliburton disclosed (here) that the Department of Justice and a French magistrate were investigating possible bribery related to the project.  In June 2004, the company terminated the contract with the former head of its Kellogg Brown & Root subsidiary, Jack Stanley, "because of violations of Halliburton's and Dresser’s codes of business conduct that, to Halliburton’s knowledge, involve the receipt by these persons of improper personal benefits. Evidence of these violations was uncovered in connection with the previously disclosed investigation related to the construction and subsequent expansion by TSKJ of a natural gas liquefaction facility in Nigeria." (See 8-K here).  The SEC's latest subpoena means that the investigation is continuing, and may be focusing on whether illegal payments were made through intermediaries. (ph)

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