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Kazakhstan payment causes compliance concern

In its latest SEC filing, chemical company LyondellBasell Industries NV reported possible compliance problems in connection with a project in Kazakhstan.

The company said it made a voluntary disclosure to the DOJ.

Details about the amount of the suspect payment or who received it weren’t released.

A Bloomberg report from 2010 said a payment of $7 million made two years earlier to ‘an individual affiliated with a Kazakh company, SAT & Co.’ is at the center of the investigation.

Bloomberg said,

SAT & Co. is 50.46 percent owned by Kenes Rakishev according to the Kazakhstan Stock Exchange Web site. Rakishev is the son-in-law of Imangali Tasmagambetov, the mayor of the Kazakh capital Astana and the nation’s former prime minister.

LyondellBasell is based in Rotterdam, the Netherlands and trades on the NYSE under the symbol LYB.

It made a similar disclosure about the Kazakhstan payment late last year.


Here’s the full FCPA disclosure from LyondellBasell’s Form 8-K filed with the SEC on June 17:

We have identified an agreement related to a former project in Kazakhstan under which a payment was made that raises compliance concerns under the U.S. Foreign Corrupt Practices Act (the “FCPA”). We have engaged outside counsel to investigate these activities, under the oversight of the Audit Committee of the Supervisory Board, and to evaluate internal controls and compliance policies and procedures. In this respect, we may not have conducted business in compliance with the FCPA and may not have had policies and procedures in place adequate to ensure compliance. We made a voluntary disclosure of these matters to the U.S. Department of Justice and are cooperating fully with that agency. We cannot predict the ultimate outcome of these matters at this time since our investigations are ongoing. Therefore, we cannot reasonably estimate a range of liability for any potential penalty resulting from these matters. Violations of these laws could result in criminal and civil liabilities and other forms of relief that could be material to us.

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