Damen Shipyards faces Broader Corruption Allegations

The Public Prosecution Service suspects shipbuilder Damen shipyards of corrupt and misleading acts in more countries than previously known. This is according to the indictment against the largest shipbuilding group in the Netherlands and three directors, made public on Wednesday. The first preliminary hearing in this case will be held in Zwolle on Monday, with company leadership identified as suspects.

The case carries meaningful consequences for Damen, which is facing financial difficulties due to design issues in the construction of ships for the German navy – a contract valued at approximately 10 billion euros. A conviction for corruption could result in a four-year ban from government contracts. Damen is the largest defense company in the Netherlands and builds frigates for the Dutch navy,among other projects.

The Public Prosecution Service alleges that the company, led by former CEO Kommer Damen, current CEO Arnout Damen, and previous chairman René Berkvens, committed forgery to conceal excessive commission payments to intermediaries. These alleged actions occurred in connection with Damen deals worth hundreds of millions of euros in Brazil, Sierra Leone, Curaçao, Togo, Ghana, the Bahamas, Trinidad and Tobago, and Indonesia. The Public Prosecution Service also accuses Damen of deliberately providing incorrect information on export declarations fourteen times in 2022 to circumvent sanctions against Russia.

Preferential Treatment

In deals in Brazil and Curaçao, the Public Prosecution Service believes it can prove that Damen bribed officials to secure preferential treatment in ship purchases. in other cases, Damen is accused of manipulating records to disguise payments to intermediaries who assisted with global sales.

For instance, over a decade ago, Damen allegedly transferred nearly $350,000 to Swiss and Chinese bank accounts linked to the supply director of the Brazilian state oil company Petrobras, hoping to secure orders from the oil giant. In Curaçao, Damen is said to have offered a director of the local port authority 220,000 euros contingent on orders for Damen ships.