Indian Oil Corporation launches probe into allegation of US firm bribing its officers

State-owned Indian Oil Corporation (IOC) has launched an investigation into allegations that a US-based specialty chemicals company bribed its officials 15 years ago to secure contracts to supply catalysts.

According to the company’s disclosure, Albemarle Corporation, a global supplier of specialty chemicals, is accused of paying an intermediary $1.14 million between 2009 and 2011. In return, the company reportedly received about $11.14 million in profits during that period transactions with the IOC in accordance with the order of the US SEC dated September 28, 2023.

Albemarle was implicated in a bribery case by US authorities in 2017, and it settled the case in September 2023, paying more than $198 million in fines to avoid prosecution.

In its filing, the IOC emphasized that it is neither a party nor a defendant in the US SEC proceedings, however, the company has initiated an internal review to fully understand the facts surrounding the allegations and determine the necessary steps.

IOC has reaffirmed its commitment to the highest standards of governance, transparency and regulatory compliance in all the regions it operates in. The company operates 10 of India’s 22 refineries with a total capacity of 80.8 million tonnes per annum, refining crude oil into fuels such as petrol. and diesel.IOC also controls about 40 percent of the fuel market in India.

“We assure our stakeholders, partners and employees that we are a law-abiding company in full compliance with all laws,” the company said in a statement.

According to the SEC order, Albemarle’s consultant and sales agent bribed unnamed IOC decision makers between 2009 and 2017, as well as a private sector client between 2009 and 2017. Non-public information for Albemarle.

The agent’s involvement came after the IOC threatened to put Albemarle on the “holiday list,” a sanction that would have barred the company from future business in India for failing to meet the labor guarantee.

The agent approached Albemarle’s Middle East staff, claiming it could help the company avoid the vacation roster problem. Albemarle then hired the agent, despite knowing the agent would use a portion of his compensation to bribe senior IOC officials, such as stated in the SEC order.

The agent, whose identity was not disclosed in the SEC filing, said two former senior IOC officials were reportedly on its board of directors.

Albemarle’s regional director warned the company’s U.S. sales manager about possible bribery. He expressed concern that hiring the agent would violate the U.S. Foreign Corrupt Practices Act (FCPA), but the sales manager signed a backdated consulting contract with the agent in August 2009. , which provided for a commission of 3 percent, three times what Albemarle was paying its existing agent in India.

Immediately after the agent’s engagement, the threat to add Albemarle to the vacation list was withdrawn.

Albemarle also paid excessive commissions to an agent to secure catalyst orders from private customers in India between 2009 and 2017. The SEC found that Albemarle’s corrupt practices extended to securing contracts with the IOC and companies in Indonesia and Vietnam. resulting in more than $63.5 million in bribes.