Malaysia probes Aker Solutions over dealings with Petronas

Malaysia’s anti-graft agency has started investigating oil services provider Aker Solutions on suspicions of making false statements in its dealings with state-owned company Petronas.

Reuters, quoting three sources familiar with the probe, said that the Malaysian Anti-Corruption Commission (MACC) was looking into allegations that Aker Solutions made false representations regarding the ownership of one of its Malaysian units to win licenses from Petronas.

The licenses are normally reserved for companies that met ethnic quota requirements under Malaysian law.

Aker Solutions denied any wrongdoing, saying that to its knowledge its Malaysian entities fulfilled all applicable requirements.

“Documentation and information regarding company set-up, including ethnic quota requirements, have been provided in all licence renewal processes to verify that the companies meet the requirements for a Petronas licence”, the company said in an emailed statement to Reuters.

Aker Solutions also said it had provided information on its company set-up and organization, as well as access to its Kuala Lumpur offices to the MACC.

Malaysia practices a form of affirmative action, in which a large portion of contracts awarded by state-linked companies such as Petronas, are reserved for ethnic Malays and indigenous people.

The news agency also stated that the southeast Asian country’s system of preferential treatment has long been criticized as being open to abuse with Malay frontmen often offering their names to non-Malay businesses to obtain government contracts.

Under Malaysia’s anti-corruption law, penalties for making false statements could include imprisonment for a term not exceeding 20 years and a fine of not less than five times the sum or value of the gratification which is the subject of the offence.

Malaysian investigators in June contacted Norwegian authorities for assistance to gather evidence and statements from witnesses in Norway, but the case has been unable to move forward due to coronavirus travel restrictions, a MACC source stated.

Aker Solutions has six subsidiaries registered in Malaysia. Last year, the company reported $268.3 million in revenue from its Malaysian businesses.

It is also worth mentioning that Aker Solutions and Kvaerner recently completed a merger whereby Aker Solutions has absorbed all the assets, rights and obligations of Kvaerner and Kvaerner has been dissolved.