Thursday, May 28, 2009

Halliburton chief denies company still tied to KBR


Halliburton Co. CEO Dave Lesar today dismissed suggestions by a shareholder that the 2007 spinoff of its former subsidiary KBR was a ruse and that Halliburton's recent agreement to pay most of KBR's legal fines in a federal bribery case was an example of the companies' ongoing connection.

"First of all, let's be very clear, KBR and Halliburton are legally separated," Lesar said at Halliburton's annual shareholders meeting.

"But as a step in that separation of KBR from Halliburton, we agreed to indemnify KBR for any payments they had to make related to these matters to make sure they were put off on their own in a way that they could be viable and they could do well in the marketplace, which they have," he said.

The answer was in response to a question by longtime Halliburton critic and shareholder activist Pretap Chatterjee, who raised concerns about a February legal settlement in which Halliburton agreed to pay $382 million of the $402 million in criminal fines facing KBR faced in connection with bribery charges in Nigeria.

"I'm concerned that this suggests the two companies are not legally separate, but in fact the separation that occurred two years ago is legal fiction," Chaterjee said, during a question-and-answer portion of the shareholder meeting.

"Why are we paying the price of KBR's mistakes unless in fact the two companies are not divorced as we have been told?"

No comments: