Offshore drilling contractor Vantage Drilling International announced that it has concluded a settlement agreement with the Securities and Exchange Commission, in which it has agreed to pay $5 million to resolve a previously disclosed investigation into potential violations of the internal accounting control provisions of the U.S. Foreign Corrupt Practices Act.
The investigation arose in 2015 from allegations of improper payments by a director of Vantage Drilling Co. (VDC) to former officials of Petrobras made in 2009 and 2010 in connection with the contracting of the Titanium Explorer drillship to Petrobras. In August 2017, Vantage Drilling said that it received a letter from the Department of Justice acknowledging Vantage’s full cooperation in the DOJ’s investigation and closing the investigation without taking any action against the company.
From the outset of the investigation, Vantage said it provided its full cooperation to both the Justice Department and the SEC. According to the SEC order, that cooperation included the voluntary disclosure of information obtained during its own internal investigation, highlighting key documents and disclosing facts “that the Commission would not have been able to readily and independently discover,” the SEC order states.
Further, Vantage took the following remedial actions to strengthen its ability to prevent or detect corruption, including:
- Reconstituting its board of directors in February 2016;
- Obtaining a completely new management team, including a new chief executive officer, chief financial officer, general counsel, chief compliance officer, and corporate secretary;
- Severing its relationship with the agent;
- Undertaking a comprehensive review of and enhancing its anti-corruption policies and procedures in consultation with outside counsel and consultants;
- Improving its third-party due diligence procedures;
- Undertaking a review of all its relationships with joint venture partners, agents, customs brokers, and freight forwarders; and
- Committing additional resources to the compliance and internal audit functions at a time when the company reduced its overall expenses.
Vantage neither admitted nor denied any of the SEC’s allegations, except as to jurisdiction, which it admitted.
With the settlement of this matter with the SEC and the earlier decision by the Department of Justice to close its inquiry into Vantage and VDC without taking any action, the investigation of Vantage and VDC by the U.S. government for possible violations of the FCPA has formally concluded.