HOUSTON (CN) – A federal judge scrapped a complaint that claimed Parker Drilling executives bribed officials in Kazakhstan and Nigeria and saddled the company with a $20 million internal investigation.
Shareholder Douglas Freuler filed the federal complaint against Delaware-based Parker Drilling and 13 of its directors and officers for violating the Foreign Corrupt Practices Act.
The drilling company’s leadership shirked their responsibility to comply with act and with Securities and Exchange Commission guidelines, as Parker indulged in illegal activities abroad to boost revenues, according to the derivative suit. The company then came under the scrutiny of the SEC and the Department of Justice, causing Parker to spend $20 million investigating Foreign Corrupt Practices Act violations, Freuler said.
U.S. District Judge Melinda Harmon tossed the complaint, agreeing with Parker that the shareholder’s claims did not hold water under Delaware law.
Parker and its officials argued that Freuler failed to take his claims to the board of directors before filing suit, and he never demonstrated such actions would have been futile. Parker also claimed Freuler lacked specifics as to each official’s participation in or knowledge of wrongdoing.
Freuler had sued for five causes of action. “The Court notes that claims for abuse of control, gross mismanagement, and waste of corporate assets all arise from the alleged breach of fiduciary duties and have been viewed as merely repackaging the same issue under different causes of action rather than as separate torts,” Harmon wrote.
The judge dismissed the case without prejudice, giving the shareholder 21 days to file an amended complaint.