Sembcorp Marine shares plunge 9.09% after Brazil police issues search warrant on subsidiary
At around 3.30pm Singapore time, Sembcorp Marine shares were at S$1.40, 9.09% or S$0.14 lower than Tuesday’s closing price of S$1.54.
![Sembcorp Marine](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/news-article-image-folder/bg_train_366750221.jpg/jcr:content/renditions/original-size.webp)
Shares of rig builder Sembcorp Marine faced a steep selloff on Wednesday after Brazil authorities were reported to have issued a search warrant on its shipyard in Brazil as part of an ongoing graft investigation.
At around 3.30pm Singapore time, Sembcorp Marine shares were at S$1.40, 9.09% or S$0.14 lower than Tuesday’s closing price of S$1.54.
Sembcorp Marine said that the search was in relation to investigations against Guilherme Esteves de Jesus, a former consultant engaged by its Brazilian subsidiary Estaleiro Jurong Aracruz (EJA), who has been arrested by the Brazilian Federal Police and is currently facing ongoing criminal charges that have not concluded.
The investigations are tied to Operation Car Wash in Brazil, the country’s biggest anti-graft crackdown which sent the its former president Luiz Inacio Lula da Silva to jail.
EJA’s former president, Martin Cheah Kok Choon is also involved in the investigations, the firm said.
Sembcorp Marine to co-operate fully with Brazil police
In a regulatory filing with the Singapore Exchange, Semcorp Marine said it has ‘co-operated fully with the Brazilian Federal Police and provided materials within the scope of the warrant’.
The company added that it has a strict compliance programme and continuously work to ensure its policies and procedures are in place to prevent any violation of anti-corruption laws applicable to its operations.
‘The company wishes to reiterate that the group is committed to the highest standards of compliance with anti-corruption laws and does not condone and will not tolerate any improper business conduct,’ it said.
In 2017, rival Keppel Offshore & Marine, a unit of conglomerate Keppel Corp, agreed to pay a US$422 million fine to resolve charges in a bribery scandal with Brazilian officials.
“Hold” recommendation on Sembcorp Marine: OCBC Investment Research
In a research note on Wednesday, OCBC Investment Research said that it would be best for most investors to wait for clarity on the Brazil issue, as it maintained its “hold” recommendation on the company while it lowered the fair value estimate to S$1.50.
‘Without clarity on Brazil, this has been one of the reasons why we have been reluctant to recommend a 'buy' on the stock, though there have been trading opportunities with short time-frames in the past,’ said the experts in the OCBC research note.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
![](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/Shares global component NA banner.jpg/jcr:content/renditions/original-size.webp)
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only