UK considering charges in KBR JV probe-Halliburton

By Braden Reddall

SAN FRANCISCO, Oct 23 (Reuters) - Britain's Serious Fraud Office is considering civil claims or criminal prosecution in its probe into a Nigerian bribe scheme in which former Halliburton unit KBR Inc has already pleaded guilty, Halliburton said on Friday.

The SFO has been investigating a UK-based KBR joint venture that held a stake in KBR's multinational consortium which was involved in the bribery scheme.

Houston-based engineering firm KBR pleaded guilty in February to U.S. charges that it paid $180 million in bribes between 1994 and 2004 to Nigerian officials to secure $6 billion in contracts.

KBR admitted to paying the bribes for the TSKJ consortium -- France's Technip SA, Italy's Snamprogetti , KBR and Japan's JGC Corp -- to secure contracts for the Bonny Island liquefied natural gas terminal.

A quarterly filing with financial regulators from Halliburton on Friday said the Serious Fraud Office (SFO) is considering making claims 'under various United Kingdom laws' in its investigation of M.W. Kellogg Ltd -- a UK joint venture 55 percent owned by KBR that held part of its TSKJ share.

Halliburton, which indemnified KBR for some past liabilities when the companies split in 2007, said SFO findings of UK law violations could result in 'fines, restitution and confiscation of revenues, among other penalties, some of which could be subject to our indemnification obligations.'

The SFO investigation is three years old, but Halliburton did not mention possible UK charges or fines in past filings.

A spokeswoman for Halliburton declined to comment further.

Halliburton's indemnity for M.W. Kellogg is limited to 55 percent of any penalties, the company said, adding that the SFO's decision on charges rested on many factors, including whether the UK joint venture knew of any payments.

The bribes -- some delivered in a briefcase stuffed with $100 bills -- were paid to officials in Nigeria's executive branch as well as the state-owned Nigerian National Petroleum Corp, the U.S. Justice Department found.

The scheme involved money wired through banks in Amsterdam and New York to accounts in Switzerland and Monaco, and KBR used shell companies in Portugal in an effort to avoid breaking U.S. laws, the U.S. government said.

Halliburton has said it is also aware of Bonny Island investigations in France, Nigeria and Switzerland.

KBR and Halliburton agreed with the Justice Department to pay a $402 million fine, with Halliburton paying $382 million. Halliburton agreed with the Securities and Exchange Commission to disgorge $177 million in profits to settle parallel criminal charges that KBR violated the Foreign Corrupt Practices Act.

The SEC has said the $579 million is the highest combined settlement ever paid by U.S. companies under the FCPA. German engineering conglomerate Siemens paid $800 million to U.S. officials to settle claims that it violated the act.
(Reporting by Braden Reddall, editing by Matthew Lewis) Keywords: HALLIBURTON KBR/PROBE ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.