BOSTON (CN) - Shareholders say BG Group, a natural gas company, paid $90 million in bribes to Kazakh officials and covered it up. They say another $40 million the company called "production sharing fees" were "more likely than not, illegal and criminal bribe payments."
Plaintiffs want the company's directors to "remit to the company all of their salaries, bonuses and other compensation received for the periods during which they breached their duties."
"There have been many victims of these bribes and their cover up - beginning with the People of Kazakhstan who have been denied their right to the benefits of the resources extracted from their land and the right to the honest services of their governmental officials," according to the federal complaint. "The company and its shareholders are among the scheme's victims."
BG does business in the United States as BG Americas & Global LNG, with a Dallas headquarters.
The complaint adds: "Approximately $40 million in unspecified expenses has also been located within documents classified as 'production sharing fees.' Standard international production sharing contracts pay production sharing fees only from actual petroleum production and not before any oil and natural gas production begins. The so-called 'production sharing fees' of approximately $40 million are, more likely than not, illegal and criminal bribe payments.
"Given these facts, one can understand why Chevron, though courted by the consortium, did not participate in OKIOC [the Offshore Kazakhstan International Operating Company]. Chevron correctly viewed the $40 million "entrance fee" as an illegal bribe demand.
"On information and belief, a $100 million entrance fee was charged by the Government of Kazakhstan to BG and AGIP/ENI, the publicly-owned, Italian international energy corporation, to become joint operators in Karachaganak in 1993. On information and belief, following acceptance of a bid of $500 million against BP, BG and AGIP/ENI were required to kick back a $100 million 'loan', or $50 million each, a sum which was never reported to shareholders."
Plaintiffs want, among other things, that the defendant BG directors "remit to the company all of their salaries, bonuses and other compensation received for the periods during which they breached their duties." They are represented by Edward Sharkansky of Brockton, Mass.