The Courier & Advertiser (Fife Edition)
Petrofac stock plummets on fraud probe response
Chief operating officer removed from duties as oil firm establishes committee to liaise with Serious Fraud Office
Hundreds of millions of pounds was wiped off Petrofac’s market value yesterday after the oil explorer suspended its chief operating officer in the wake of a Serious Fraud Office (SFO) probe.
The group said Marwan Chedid had resigned from the executive board following his suspension, although it stressed its action should in no way be seen as a pre-judging of the outcome of the SFO’s probe.
On May 12, the fraud watchdog confirmed a probe into the activities of Petrofac, its subsidiaries and agents for suspected involvement in bribery, corruption and money laundering.
The opening of the probe related to its investigation into the activities of Monaco-based contractor Unaoil.
At that time, Mr Chedid and group chief executive Ayman Asfari were arrested and questioned under caution by the SFO before being released without charge.
Petrofac confirmed Mr Asfari is remaining in post but said he will play no part in the activities of a new committee set up to oversee the group’s response to the SFO investigation.
That will instead be comprised of chairman Rijnhard van Tets, chief financial officer Alastair Cochran and the firm’s independent non-executive directors.
Petrofac said “given the scale of the investigation” it was also moving to appoint a senior external specialist to oversee the “management of and response to” the investigation and review its compliance processes.
In a statement to the City, Petrofac said during 2016 it had commissioned an independent investigation into allegations that arose in the media relating to Unaoil, and had shared the findings with the SFO.
The watchdog later informed Petrofac it did not accept the findings and said it did not consider the company had cooperated with it in terms of relevant SFO and sentencing guidelines.
Petrofac said it was “for the SFO to determine the outcome of its investigation and prosecutions in due course” but said it was committed to cooperating with the investigation and was devoting “very significant resources” to its engagement with the SFO.
It said it had provided “large volumes of information” to the SFO since May 12 in response to requests formed under section 2 of the Criminal Justice Act 1987, and would continue to give access to information required by investigators
The update caused worried investors to dump stock, with the group’s share price falling more than 27% in morning trading. Petrofac’s stock eventually closed down 184.20 at 430.80 following trading yesterday.