Australian engineering firm Worley (ASX:WOR) has seen its shares fall at least 2.3% after it denied allegations of bribery and corrupt conduct in Ecuador.
Worley has a strong presence in the UK, with bases in Aberdeen, Glasgow, Bristol, Great Yarmouth, Grimsby, Leeds, London, Manchester, and Stockton-on-Tees.
Yesterday, the company requested an immediate trading halt on its shares.
The move followed an international arbitration tribunal deciding to dismiss the firm’s arbitration in Ecuador on judicial grounds in December, following a years-long process.
In 2019, Worley commenced the arbitration in Ecuador which related to “historic unpaid trade receivables” which is the firm claims is owed to its subsidiary by Petroecuador, a state-owned enterprise and a related state entity.
The receivables relate to contracts carried out from 2011 to 2017, throughout the work Worley states it provided “significant value” to its customers.
The parties involved were unable to come to an agreement on payment, kicking off the arbitration process in 2019.
Worley denies corruption, bribery
In December, the tribunal dismissed Worley’s arbitration on jurisdictional and admissibility grounds, including allegations of corruption, illegality or bad faith by the Australian engineering company and a subcontractor, citing “wilful blindness” by Worley towards the subcontractor’s corruption.
In a statement released to the ASX, Worley denied any “corruption, illegality or bad faith” and said it “did not breach anti-bribery and corruption laws”.
Worley said it disagrees with the tribunal’s decision and is “considering the options for further legal proceedings”.
The company said the decision was confidential under applicable rules at the time it was issued but since then, Ecuador has made the decision public.
In addition, the Sydney-headquartered firm said principals of a Worley subcontractor were prosecuted and found to be corrupt by an Ecuadorian court
Following investigations, Worley said terminated its connection with that subcontractor in 2016 “as soon as it became evident to Worley that the subcontractor had engaged in wrongdoing”.
“Worley had followed proper processes, including conducting due diligence, and denies that it was wilfully blind in respect of the subcontractor’s corruption,” the company said.
“Since 2017, Worley has further strengthened its processes for engagement of business partners and subcontractors.”
Worley also clarified that Petroecuador owed Worley A$58 million (£30.6 million) on a net basis, which has been recorded as non-current in Worley’s periodic reporting since fiscal 2019.