State-owned Indian Oil Corporation (IOC) has initiated an investigation into allegations that US-based speciality chemicals company Albemarle Corporation bribed its officials between 2009 and 2011 to secure contracts for supplying catalysts.
The company disclosed that Albemarle allegedly paid around $1.14 million in commission to an intermediary in India. In return, Albemarle reportedly earned approximately $11.14 million in profits from its dealings with IOC during the same period, as per a U.S. SEC order issued on September 28, 2023.
On December 24, 2024, IOC share price was up 0.83%, trading at ₹138.95 on the Bombay Stock Exchange (BSE) at 12:50 PM (IST). According to BSE data, the stock recorded a total traded volume of 5.69 lakh shares, with a turnover of ₹7.876 crore.
Albemarle was first implicated in bribery by U.S. authorities in 2017. The company resolved the case in September 2023 by paying a fine of over $198 million to avoid prosecution. However, the latest allegations involve commissions paid to an intermediary who allegedly bribed IOC officials to secure catalyst orders and obtain sensitive non-public information for Albemarle.
In its filing, IOC clarified that it is neither a party to the U.S. SEC proceedings nor accused in the matter. Nevertheless, the company has launched an internal review to fully understand the facts surrounding the allegations and to determine the appropriate course of action. IOC emphasised its commitment to maintaining high standards of governance, transparency, and regulatory compliance across its operations.
According to the SEC order, an Albemarle consultant and sales agent bribed unnamed decision-makers at IOC between 2009 and 2011. The bribes were allegedly paid to secure catalyst orders and obtain confidential information for Albemarle. The agent’s involvement reportedly followed IOC’s threat to place Albemarle on a “holiday list,” which would have barred the company from future business in India due to its failure to meet performance guarantees.
The agent reached out to Albemarle’s Middle East personnel, claiming to help remove the “holiday list” sanction. Despite concerns from a regional director about potential violations of the U.S. Foreign Corrupt Practices Act (FCPA), Albemarle hired the agent in 2009. The agent’s commission was three times higher than what Albemarle typically paid to its agents in India.
The SEC order also revealed that Albemarle’s corrupt practices extended beyond IOC to secure contracts with private customers in India, as well as companies in Indonesia and Vietnam.
Between 2009 and 2017, Albemarle reportedly paid excessive commissions, amounting to over $63.5 million in bribes, to secure catalyst orders. These actions further underline the extent of the alleged bribery network.
IOC, which operates 10 out of India’s 22 oil refineries and controls about 40% of the fuel market in India, reassured its stakeholders, partners, and employees of its law-abiding nature. The company reaffirmed its adherence to legal and regulatory standards, stating it is fully compliant with all laws.
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Published on: Dec 24, 2024, 1:41 PM IST
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