Netherlands-based oil and gas services provider Frank’s International N.V. agreed Wednesday to pay the SEC $8 million to resolve FCPA violations for bribing Angolan officials through a sales agent.
Frank’s, now known as Expro Group Holdings N.V., was charged by the SEC in an administrative order with violating the FCPA’s anti-bribery, books and records, and internal accounting controls provisions.
The company settled without admitting or denying the SEC’s findings.
Frank’s agreed to pay a civil penalty of $3 million and about $5 million in disgorgement and pre-judgment interest.
According to the SEC, from 2008 through 2014, Frank’s paid commissions to a sales agent in Angola when employees knew there was a high probability that the agent would use the commissions to bribe Angolan government officials.
The SEC said Frank’s retained the agent in Angola in 2007 “without conducting due diligence and without a contract in place.”
The agent didn’t have “the relevant technical background to advocate on the company’s behalf before [state-owned] Sonangol and, in fact, did not attend technical meetings with Sonangol,” the SEC said. “However, he had personal relationships with [an Angola official] and other Sonangol employees.”
In 2008, Frank’s regional executives approved a backdated agency agreement with a company owned by the Angola agent. By then, the company had already paid the agent $688,000, the SEC said, and retained two “previously at-risk contracts” and won two new contracts.
In 2011 and 2012, the agent passed $555,000 to the Angolan official, the SEC said.
Frank’s later entered into three more agreements with the Angola agent. Between 2008 and 2014, the company paid the agent about $5.5 million. During that time, it won four new contracts in Angola, the SEC said.
Some of Frank’s leadership and oversight of West Africa operations was located abroad, the SEC said, but many senior executives, including the general counsel and CFO, were located in Houston, Texas.
Frank’s became a public company (and issuer) with its IPO in August 2013.
“Houston-based employees reviewed and approved the contracts” between Frank’s and the agent, and Frank’s continued to pay the agent after becoming a public company, the SEC said.
The SEC credited Frank’s for cooperation and remediation, including bringing witnesses from outside the United States for interviews, voluntarily producing relevant documents, and terminating the involved employees and its relationship with the agent in Angola.
In a November 2022 SEC filing, the company said it received a declination from the DOJ subject to a satisfactory resolution of the SEC’s civil claims, according to data from FCPA Tracker.
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