Indian Oil Corporation Limited (IOCL), a state-owned enterprise, has initiated an internal review into allegations that a U.S.-based speciality chemicals company, Albemarle Corporation, engaged in bribery to secure contracts with IOCL over a decade ago. The allegations were revealed in a U.S. Securities and Exchange Commission (SEC) order dated September 28, 2023.
According to the SEC, Albemarle allegedly paid $1.14 million in commissions to an Indian intermediary between 2009 and 2011 to influence business dealings with IOCL, earning approximately $11.14 million in profits from the contracts. The U.S. authorities discovered Albemarle’s involvement in bribery in 2017, leading to a settlement in September 2023, where Albemarle paid over $198 million in penalties to avoid prosecution.
In its filing, IOCL clarified that it was not a party to the SEC proceedings and that no direct allegations had been made against the company. However, IOCL stated that it has launched a fact-finding review to thoroughly investigate the claims and take appropriate measures.
IOCL emphasised its commitment to ethical practices, governance, and regulatory compliance in all its operations. “We assure our stakeholders, partners, and employees that we are a law-abiding company committed to transparency and the highest standards of governance,” the filing read.
The SEC report indicated that Albemarle used an Indian intermediary after IOCL considered placing the company on a “holiday list” due to concerns over unmet performance guarantees. This action would have barred Albemarle from future contracts with IOCL. To resolve the issue, Albemarle engaged the intermediary as a consultant, despite warnings from internal personnel about potential violations of the Foreign Corrupt Practices Act (FCPA).
The SEC order also noted that the Indian intermediary received a 3% commission rate—three times higher than usual—shortly after which the “holiday list” threat was withdrawn. Between 2009 and 2017, Albemarle reportedly used similar methods to secure business from Indian private companies and international clients in Indonesia and Vietnam, involving over $63.5 million in corrupt payments.
Indian Oil, India’s largest oil refiner, operates 10 of the country’s 22 refineries with a combined capacity of 80.8 million tonnes per year and holds approximately 40% of the domestic fuel market. The company’s review aims to uphold its reputation and ensure accountability in light of the allegations.
