Indian Oil Corporation has launched an investigation into allegations that a US company bribed its employees

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

Albemarle, a global supplier of specialty chemicals, is accused of paying nearly $1.14 million in commission to a broker in India between 2009 and 2011, according to a company filing. In contrast, the company reportedly made profits of approximately $11.14 million from its dealings with the international oil company during that period, according to a US Securities and Exchange Commission order issued on September 28, 2023.

Albemarle was implicated in a bribery case by US authorities in 2017, and resolved the case in September 2023 by paying a hefty fine of more than $198 million to avoid prosecution.

In its filing, the IOC asserted that it is not a party to the SEC proceedings and is not a defendant in connection with them. However, the company has initiated an internal review to fully understand the facts surrounding the allegations and determine the necessary actions to be taken.

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

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

According to the SEC order, an Albemarle consultant and sales agent bribed unnamed decision-makers at the International Olympic Committee between 2009 and 2011, as well as a private client between 2009 and 2017. These bribes were allegedly paid to secure incentive requests and obtain sensitive information. Non-general information about Albemarle.

The agent’s intervention came after the IOC threatened to add Albemarle to its “holiday list”, a penalty that would prevent the company from doing any future business in India for failing to meet its performance guarantee.

The agent reached out to Albemarle employees in the Middle East, claiming he could help the company avoid the holiday menu problem. Albemarle then hired the agent, despite knowing there was a high probability that the agent would use a portion of his compensation to bribe senior IOC officials, as described in the SEC order.

The agent, whose identity was not disclosed in the Securities and Exchange Commission filing, reportedly claimed that two former senior IOC officials were part of its board.

An Albemarle regional manager alerted the company’s U.S.-based sales manager about the potential bribery. He expressed concern that hiring the agent would violate the US Foreign Corrupt Practices Act (FCPA). Despite these warnings, the sales executive signed an old consulting agreement with the agent in August 2009, which stipulated a 3% commission — three times the rate Albemarle paid its current agent in India.

Shortly after the agent’s involvement, the threat to add Albemarle to the holiday list was removed.

Between 2009 and 2017, Albemarle also paid excessive agent commissions to secure incentive orders from private clients in India. The SEC found that Albemarle’s corrupt practices extended to securing contracts with the International Olympic Committee and companies in Indonesia and Vietnam, resulting in bribes of more than $63.5 million.