"From September 2007, Frank's tried to increase its business in Angola, but learned through an oil company that Sonangol [Angolan state oil company] was blocking its hiring", refers a dispatch from the SEC Norte-American, equivalent to the Portuguese Securities Market Commission (CMVM), to which Lusa had access.
According to the document, dated 26 April last, and which reports on the stock market regulator's decision on the company's actions, the directors of Frank's found out, "including, that Sonangol had given instructions to the customer to resort to a competitor of Frank's who allegedly made a superior financial investment in Angola".
In exposing facts given as proven, and which resulted in a fine of three million dollars, the SEC refers that Frank's was also informed by a senior executive of Sonangol that the Angolan oil company "could change its mind" if a company of consultancy and "pay five percent of the value of the contract to the consultancy company for the benefit of senior officials of the Angolan state company".
Faced with these facts, a Frank's manager based in the region "assessed the seriousness of the situation" and wrote in an email: "I don't think it is an exaggeration to say that we are fighting for our survival".
So, in October 2007, Frank's made its decision. "It did not form the consulting firm, but hired a sales agent" in Angola, concludes the SEC document.
Thus, "without carrying out due diligence and without a contract in force, the company hired the 'Angolan agent', who had known the national director of another Frank's subsidiary that operated in Africa for more than two decades", adds the regulator's document.
This agent in Angola "did not have the necessary technical knowledge to defend the company with Sonangol and, in fact, did not participate in technical meetings with the Angolan oil company", mentions the dispatch.
However, he had personal relationships with Angolan authorities and other Sonangol officials, it can be read.
Frank's then hired the agent, despite the fact that the foreign company's employees in the region were aware of the "high probability" that he would use "the payments he received from Frank's to bribe Angolan government officials", which happened between January 2008 and October 2014.
For the SEC, this probability was a reality: "some of the funds were diverted to an Angolan government official to influence the award of oil and natural gas service contracts".
For a material period, Frank's lacked adequate internal accounting controls related to the retention and payment of agents who interacted with foreign government officials on behalf of the company.
But in the presentation of the case, the SEC also points out that "the fact is that after hiring the Angola Agent, the company's meetings with Sonangol went from short and unproductive meetings to successful meetings with the presence of approximately 20 employees".
Frank's International N.V. was a global provider of tubular engineering services, manufacturing tubes and specialist well construction and intervention solutions for the oil and gas industry, incorporated in the Netherlands, headquartered in Den Helder, the Netherlands, and merged with Expro Group Holdings.
After its IPO (initial public offering, or dispersion and capital on the stock exchange) on August 9, 2013 until October 1, 2021, its shares began to be traded on the New York Stock Exchange.
US law criminalizes national companies operating abroad in terms of corruption and bribery, among other financial offenses, which, in practice, means that even operating outside the US, they have to comply with US law.
As in 2013, Frank's became listed on the New York Stock Exchange, subject to the rules of US companies.
