Keppel Corp donates $1 million to President’s Challenge even as scandal-ridden O&M revenue could further decline

Keppel Corporation celebrated its 50th anniversary last Saturday by donating $1 million to the President’s Challenge 2018. President Halimah Yacob received the donation cheque personally from Keppel chairman Lee Boon Yang at company’s charity run over the weekend.

President Halimah said at the event: “I hope that companies in Singapore will continue to give generously, not only with financial support, but also through volunteerism and sharing of knowledge and expertise.”

Speaking for the organisation, Keppel chairman Dr Lee added: “Our aim is also to do good as we do well. We are committed to making a positive impact on the community wherever we operate.”

Keppel Corp’s donation comes at a time when insiders have noted that the company’s scandal-ridden Offshore and Marine (O&M) annual revenue could fall further in 2019, following a declining trend that was triggered by the company’s corruption case.

Late last year, news broke that Keppel Offshore & Marine was involved in a mega bribery case in Brazil. Some US$55 million were reported to have been paid by a Keppel agent to Brazilian govt officials in order for Keppel to secure deals in Brazil. These “improper payments” were made over a period from 2001 to 2014, and they were carried out with the knowledge or approval of former Keppel senior executives.

When Bloomberg broke the news last August, Keppel quickly issued a public statement to deny the allegation. The Temasek subsidiary only came clean four months later and acknowledged that the corrupt payments made by their agent to Brazilian officials were “made with knowledge or approval” of former senior executives of Keppel.

The company’s net profit subsequently took a hefty 72 per cent plunge, after the company acknowledge the corruption charges. Keppel Corp reported a net profit of S$217 million for the financial year of 2017 and revealed that the financial penalty that the corporation was slapped with, coupled with the legal, accounting and forensics costs amounted to S$619 million.

The corporation earned a net profit of S$784 million net profit for the 2016 financial year. If Keppel did not have to pay the financial penalty and other related costs, it would have registered a net profit S$836 million for 2017, turning in 7 per cent higher profits than in 2016.

In a recent report, DBS Equity Research warned that Keppel Corp’s O&M annual revenue could drop to between $2 billion to $4 billion in 2019 if the firm’s order books continue to shrink and if its contract flows do not match expectations

Meanwhile, taking a leaf out of Keppel Corp’s book, the Fullerton Heritage Group presented a donation of $200,000 that the group raised for the President’s Challenge 2018 by organising private auctions at gala dinners and through the partial proceeds of table ticket sales.