JGC Corp in US$ 244 million Nigerian bribery settlement
By Helen Wright31 January 2011
JGC Corporation expects third quarter losses of JPY 20.1 billion (US$ 244 million) after reaching settlements with Nigerian authorities and US regulators over its role in bribing Nigerian government officials to win construction contracts.
The Japanese contractor said it has reached a potential resolution with the US Department of Justice and Securities and Exchange Commission which would result in a JPY 17.8 billion (US$ 217 million) third quarter loss, while its settlement with Nigerian authorities would cost a further JPY 2.3 billion (US$ 28 million) in the quarter.
JGC was part of a consortium of construction firms which bribed Nigerian government officials in order to win construction contracts worth over US$ 6 billion on Nigeria's Bonny Island Liquified Natural Gas facilities.
The other members of the consortium, known as TSKJ, were KBR, Technip, and Snaprogetti. The settlement agreements from JGC bring the aggregate payments made by the four companies to over US$ 1.34 billion.
JGC said that recognising the Bonny Island losses in the third quarter would also drag down its full-year results. The company has revised its consolidated 2010 net income forecast downwards from JPY 33 billion (US$ 401 million) to JPY 23.5 billion (US$ 286 million). JGC's net sales forecast remained stable at JPY 480 billion (US$ 5.8 billion).
Meanwhile, former KBR (UK) commercial vice president Wojciech Chodan is due to be sentenced in the US for his role in the orchestration of the TSKJ bribery ring on 22 February. He faces up to five years in prison.