Petrofac News 1700X397
25 May 2017

Update on SFO investigation and Board change

On 12 May 2017 the Serious Fraud Office (SFO) announced its investigation into Petrofac, related to Unaoil and other agents.

The Board is today announcing a number of decisions to ensure Petrofac can retain its focus on its operations and clients, whilst also ensuring the Company is able to continue to engage with the SFO’s investigation.

A Committee of the Board has been established to be solely responsible for the Company's engagement with the SFO and to oversee the Company's response to their investigation. This Committee comprises the Chairman, Independent Non-executive Directors and the Chief Financial Officer. Given the scale of the investigation the Committee has decided to engage a senior external specialist to oversee the Company's management of and response to the investigation. This person will also review the Company's compliance processes.

Ayman Asfari will continue in his role as Chief Executive Officer. To ensure full separation of operational duties and the investigation, he will not be involved in any matters connected to the investigation, and will have no role or responsibilities for engaging with or liaising with agents and consultants.

Separately the Board has suspended Marwan Chedid as Group Chief Operating Officer until further notice. As a consequence he has resigned from the Board.

These actions do not in any way seek to pre-judge the outcome of the SFO’s investigation.

Chairman Rijnhard van Tets said: “These decisions signal the Board’s determination to cooperate fully with the SFO and its investigation, whilst ensuring Petrofac continues to deliver for its clients.”

On 12 May 2017 the SFO confirmed that it is investigating the activities of Petrofac, its subsidiaries, and their officers, employees and agents. The investigation is related to the SFO’s ongoing investigation into the activities of Unaoil. Ayman Asfari and Marwan Chedid were arrested, questioned under caution by the SFO, and were released without charge. Since 12 May 2017 the Company has provided large volumes of information in response to very broad requests made under section 2 of the Criminal Justice Act 1987. The Company notes that the SFO will also have access to other information in the context of its wider investigation.

During 2016 the Board of Petrofac commissioned an independent investigation, with the support of external advisors, into allegations in the media in relation to Unaoil. The Board shared the findings of this investigation with the SFO. The SFO has informed Petrofac that it does not accept those findings. The matters that were the subject of the Board’s investigation will be part of the SFO’s ongoing investigation into Petrofac. The SFO has also informed Petrofac that it does not consider the Company to have cooperated with it, as that term is used in relevant SFO and sentencing guidelines. It is for the SFO to determine the outcome of its investigation and any prosecutions in due course. The Company is committed to cooperating with the SFO’s investigation. The Company is devoting very significant resources in its current engagement with the SFO.

Board Committees

Mr Asfari will stand down from the Nominations Committee, which is responsible for decisions relating to the appointment and removal of senior leadership roles, with immediate effect. An update will be given on the future composition of committees in due course.