Why Golar LNG Plunged More Than 30% Today

What happened

Shares of liquified natural gas transportation company Golar LNG (NASDAQ:GLNG)closed the session near the low point of the day, down 32%. 

So what 

The company acknowledged bribery allegations against Eduardo Antonello, the chief executive officer of Hygo Energy Transition, a joint venture between Golar and private equity firm Stonepeak Infrastructure Partners. 

Liquified natural gas tanker sailing in open waters.

Image source: Getty Images.

The company noted that the allegations against Mr. Antonello are not related to his work at Hygo, as the alleged conduct occurred in a prior position when Mr. Antonello represented Seadrill Group (NYSE:SDRL). Golar said it would still initiate a review to determine whether there have been any “deviations from its culture of compliance” related to Mr. Antonello’s work with Hygo.

Now what

Brazilian police executed search and seizure warrants related to a criminal investigation dubbed “Operation Car Wash.” The current phase of the investigation seeks to determine if a shipping company in Brazil paid $40 million in bribes to win a $2.7 billion contract from Brazilian oil company Petrobras (NYSE:PBR)

According to the Federal Public Ministry, the shipping company allegedly hired a lobbyist to get inside information from Petrobras to help create a winning bid and passed that information to Mr. Antonello, who represented Seadrill at the time. 

Hygo owns liquified natural gas carriers, including floating storage and regasification units (FSRU). Golar, along with its joint-venture partner Stonepeak, are among those that have invested more than $527 million in Hygo. Hygo Energy has filed for an initial public offering and had planned to price its shares tonight, Sept. 24, 2020. It is unclear whether there is any change to those plans.

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