Wood Group’s £2.2bn takeover of Amec Foster Wheeler could be thrown off course as the pair have been dragged into the international investigation into alleged corruption at Monaco-based Unaoil.
A circular published to disclose details of Wood Group’s acquisition of its energy support services rival reveals that Amec is co-operating with the Serious Fraud Office over its criminal investigation into potential bribery corruption and money laundering.
Wood Group’s circular to shareholders detailing its offer terms reveals that it is conducting an internal investigation into its own dealings with Unaoil.
The document confirms that a “Wood Group joint venture engaged Unaoil and that the joint venture made payments to Unaoil under agency agreements”.
Agency agreements are widely understood to mean payments to third parties which can be used to pay bribes, though there is no indication that this happened with Wood’s joint venture.
Unaoil is at the centre of a global corruption scandal with allegations that it paid bribes to win deals.
Petrofac has already been dragged into the scandal with its executives questioned by the SFO, though the company has said previously it has not found any evidence of wrongdoing.
The document continues: “From information reviewed to date, the internal investigation has not confirmed that the payments made by the joint venture to Unaoil were used by Unaoil in ways that would amount to bribery, corruption or money laundering offences, or that there was any involvement in or knowledge of bribery, corruption or money laundering offences on the part of Wood Group companies, the joint venture or their personnel.”
Wood Group said the internal investigation continues and relevant local prosecutors have been informed.
Should the investigation find evidence of corruption and the SFO prosecutes, it has the potential to result in heavy fines for the company that could put its business into doubt and put the Amec takeover in question.
“Any violation of legal and regulatory requirements identified during the course of these investigations could have a material adverse effect on the business, results of operations and financial condition of Wood Group and, if the [takeover] completes, the combined group,” the document concludes.
Amec’s circular to shareholders said that it has received requests from the SFO and US Department of Justice about its dealings with Unaoil and the use of third parties.
The document adds: “Amec Foster Wheeler is co-operating with and assisting the SFO in connection with such matters, which Amec considers may well develop into an investigation into Amec Foster Wheeler by the SFO.
“Given the stage of these matters, it is not possible to estimate reliably what effect the outcome of such matters may have on Amec.”
In the circular, Wood Group said it has “procedures, systems and controls in place to monitor internal and external compliance with relevant laws and regulations and use of commercial intermediaries, but there can be no assurance that Wood Group’s policies and procedures will be followed at all times or will effectively detect and/or prevent violations of the applicable laws or other fraudulent activity by one or more of their employees, consultants, subcontractors, commercial intermediaries or partners.”
A spokesman for Amec said: “The company takes its obligation to conduct business ethically very seriously and has in place a robust code of conduct and anti-bribery and corruption policy.”
Unaoil declined to comment.