An internal investigation on behalf of Saipem is said to have found no evidence of payments to Algerian public officials through the brokerage contracts or subcontracts examined, although violations of internal rules have been uncovered.

Eni, a major shareholder in oil and gas contractor Saipem, confirmed earlier this year that prosecutors in Italy had extended their investigation into alleged corruption involving Saipem to include Eni and its CEO.

In November last year, the Prosecutor for Milan notified Saipem that it was investigating corruption in connection with contracts in Algeria, prompting the resignation of Saipem CEO Pietro Franco Tali and Alessandro Bernini, chief financial officer at Eni.

Saipem’s board said this week that it had analysed the conclusions reached by external consultants – an investigation that was commissioned by the board on 5 December, 2012, following the initiation of the preliminary investigation by the Public Prosecutor of Milan.

Saipem said the internal investigation was based on the examination of documents and interviews with personnel from the company and other companies in the group. This excluded personnel that, to the best knowledge of the company, would be directly involved in the criminal investigation so as not to interfere in the investigative activities of the Prosecutor.

The board has decided to convey the findings of the external consultants to the Public Prosecutor of Milan.

The consultants reported to the board that they found no evidence of payments to Algerian public officials through the brokerage contracts or subcontracts examined.

However, Saipem said the investigation discovered violations, deemed detrimental to the interests of the company, of internal rules and procedures that were in force at the time. These were in relation to the approval and management of brokerage contracts and subcontracts examined, and a number of activities in Algeria.

The board has decided to initiate legal action to protect the interests of the company against certain former employees and suppliers, reserving any further action if additional elements should emerge.

Also, at the request of the US Department of Justice, Saipem has entered into a so-called “tolling agreement”. This extends by six months the limitation period applicable to any possible violations of federal laws of the US in relation to previous activities of Saipem and connected subsidiaries.

Saipem made it clear that the tolling agreement did not constitute an admission by Saipem of having carried out anything unlawful, nor to be subject to the jurisdiction of the US for the purpose of any investigation or legal procedure.

Saipem said that it also intends, therefore, to collaborate completely with the investigations by the US authorities.

In June, Saipem reduced its outlook for 2013 and now expects to report a full-year net loss of between €300 million and €350 million, compared to its previous net income forecast of €450 million.

It said it also expected earnings before interest and tax to be down by between €650 million and €750 million this year – around 50% of this relating to the company’s operations in Algeria.

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