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Japanese Company Discloses DOJ FCPA Investigation

By Christopher M. Matthews | July 12, 2022 12:09 pm

Japanese engineering company JGC Corporation disclosed that it is in talks with U.S. Justice Department about resolving potential Foreign Corrupt Practices Act charges stemming from the company’s participation in a decade-long scheme to bribe Nigerian officials for construction contracts to build liquefied natural gas facilities on Bonny Island, Nigeria.

“We hereby report that DOJ has been in contact with JGC regarding their investigation of the TSKJ matter and JGC and DOJ are engaged in discussions about a potential resolution of that investigation relating to JGC,” the company said in its annual report. “Under the current circumstances, the impact of the ongoing discussions with DOJ on JGC’s operations cannot be estimated.”

JGC did not say whether it also is under investigation in Japan for the Nigerian deals.

The potential settlement would be the last to come from a four-company consortium involved with the Bonny Island project, which has been under investigation since 2004 for a variety of FCPA violations connected to a $100 million bribery scheme to secure the contracts.

The consortium was awarded four engineering, procurement and construction contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build liquefied natural gas facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company. The consortium is equally owned by KBR, Inc. and Halliburton Co.; French engineering firm Technip S.A.; Italian energy firm ENI, S.p.A. and its former Dutch subsidiary Snamprogetti Netherlands B.V.; and JGC.

On July 7, the Justice Department and the Securities and Exchange Commission announced that ENI, S.p.A. and its subsidiary Snamprogetti agreed to pay $365 million to settle charges that Snamprogetti participated in the bribery scheme. The announcement came on the heels of a $338 million settlement the agencies announced last week with Technip, and a $579 settlement with KBR and Halliburton the SEC and DOJ entered into last year.

The venture hired two agents, Jeffrey Tesler and a Japanese trading company, who paid bribes to high-level Nigerian government officials to facilitate the consortium’s bid for the contracts, according to court documents. Tesler and Wojciech Chodan, a former salesperson and consultant of a United Kingdom subsidiary of KBR, were indicted in February 2009 for their alleged participation in the bribery scheme. In March, a British judge cleared the way for Tesler and Chodan’s extradition to the United States.

JGC does not issue stock on any U.S. exchanges, and thus does not fall under the FCPA’s jurisdiction as an issuer. But according to a person familiar with the matter, the U.S. government believes there is jurisdiction to pursue JGC based on co-conspirator liability. The individual said JGC’s talks with the Justice Department could result in a settlement.

JGC is represented by Manuel (Manny) A. Abascal, a partner at Latham & Watkins LLP.

The FCPA Blog first reported the news here.

Aruna Viswanatha contributed to this report.

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