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 for supplying catalysts.
According to a disclosure by the company, Albemarle Corporation, a global supplier of specialty chemicals, is accused of paying approximately $1.14 million in commission to an intermediary in India between 2009 and 2011. In return, the company reportedly earned around $11.14 million in profits from its dealings with IOC during that period, according to a US SEC order dated September 28, 2023.
Albemarle was implicated in bribery by US authorities in 2017, and it resolved the case in September 2023 by paying a hefty fine of over $198 million to avoid prosecution.
In its filing, IOC emphasised that it is neither a party to the US SEC proceedings nor accused in relation to them. However, the company has initiated an internal review to fully understand the facts surrounding the allegations and determine the necessary actions to take.
IOC reaffirmed its commitment to the highest standards of governance, transparency, and regulatory compliance across all regions in which it operates. The company operates 10 out of India’s 22 oil refineries, with a total capacity of 80.8 million tonnes per year, refining crude oil into fuels like petrol and diesel. IOC also controls around 40 percent of the fuel market in India.
“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 IOC between 2009 and 2011, as well as a private-sector client between 2009 and 2017. These bribes were allegedly paid to secure catalyst orders and obtain sensitive, non-public information for Albemarle.
The agent’s involvement came after IOC threatened to add Albemarle to a “holiday list,” a sanction that would have barred the company from future business in India due to failure to meet a performance guarantee.
The agent reached out to Albemarle’s Middle East personnel, claiming it could help the company avoid the holiday list issue. Albemarle then hired the agent, despite knowing the high likelihood that the agent would use part of its compensation to bribe senior IOC officials, as outlined in the SEC order.
The agent, whose identity is not revealed in the SEC filing, reportedly claimed that two former senior IOC officials were part of its board of directors.
An Albemarle regional director alerted the company’s US-based sales executive 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 a backdated consulting agreement with the agent in August 2009, which stipulated a 3 percent commission — three times higher than the rate Albemarle paid its existing agent in India.
Shortly after the agent’s engagement, the threat to add Albemarle to the holiday list was removed.
Between 2009 and 2017, Albemarle also paid excessive commissions to the agent to secure catalyst orders from private customers in India. The SEC found that Albemarle’s corrupt practices extended to securing contracts with IOC and companies in Indonesia and Vietnam, resulting in more than $63.5 million in bribes.