Sembcorp Industries (SGX: U96) (OTCPK: SCRPF) shares are down some 4% today. U96 shares seem to have been mildly hit by a report over a corruption arrest. This is not a repeat of the Brazilian story - that one that turned out to be entirely historical and, given how Brazil worked back then, of little surprise to anyone informed. This is a new story - but also historical: “A commercial executive from Sembcorp Marine Integrated Yard was charged this week with taking or attempting to obtain bribes totalling more than S$200,000 over a period of six years. Balakrishnan Govindasamy, 61, was said to have corruptly obtained and attempted to obtain gratifications in the form of cash totalling at least S$202,877 between 2015 and 2021, the Corrupt Practices Investigation Bureau (CPIB) said on Wednesday (Aug 16), the day Govindasamy was charged.” This is not the worst scandal ever - $20,000 a year is chicken feed if we’re honest about it.
But, you know, given the sensitivity over that Brazilian story perhaps there should be a share price reaction here? At which point 4% seems a little small.
Sembcorp Industries share price from Google Finance
But there’s an entirely another problem here. The Sembcrop Marine Yard is not part of Sembcorp any more. It’s now over in Seatrium: “Seatrium (SGX: S51) is the former Sembcorp Marine. No, the name change was not all about that Brazilian corruption inquiry - that's all dealt with anyway. Rather, there was a merger of interests and a name change seemed like a sensible thing to do at the time. “ Singapore, 3 April 2023 – Sembcorp Marine Ltd (the “Company” or “Sembcorp Marine” and, together with its subsidiaries, the “Group”), is proposing to change its name from “Sembcorp Marine Ltd” to “Seatrium Limited” following completion of the combination of the businesses of the Company and Keppel Offshore & Marine Ltd on 28 February 2023, and will adopt a new branding for the enlarged entity.” Seems fair enough, change the structure of the business then why not change the name of it at the same time? “ And Seatrium seems unchanged today.
As we say, this isn’t unheard of, corporate names getting confused. We also cannot say for certain that the Sembcrop share price move is in reaction to the bribery story for that really does strike us as being a very small problem. So perhaps we should just take this as one of those little examples that can be used as warnings. That “a” Sembcorp is involved in a story does not mean that “the” Sembcorp is involved in it - as here, Sembcorp Marine Yard is now part of Seatrium: “Sembcorp Marine Integrated Yard was a fully owned subsidiary of Sembcorp Marine, which was rebranded to Seatrium : S51 0% in April 2023.”