Join our daily newsletter At The Bell to receive exclusive market insights
- Worley (ASX:WOR) says it heavily contests the decision by a tribunal that found it had acted corruptly in Ecuador
- The company is currently assessing whether it should appeal the decision
- WOR said the AFR and other media coverage contained inaccuracies on how badly penalties could hurt Worley’s earnings
- It also says the Ecuadorian tribunal broke the law when it made its decision public
- Shares are down half a per cent, trading at $15.64 at 1:28 pm AEDT
Oil and gas engineering giant Worley (ASX:WOR) told the ASX the Ecuadorian Government erred in its legal obligations when it made a non-court tribunal’s finding Worley had acted corruptly public.
A lot is going on here – so first, here’s a recap of how we got here.
Worley has been under pressure all year and was hit by intense sell-offs last week following news that it was acting corruptly in Ecuador.
That finding was included in the text of a decision published by an “arbitrative tribunal” in the South American country at the start of the year.
Why the sell-off?
The thing is, Worley’s poor start to 2024 was borne more from the way it was perceived to have addressed the matter, rather than the actual corruption matter itself.
Worley’s shares sold off because the company was ultimately perceived to have lied to shareholders about the findings of the tribunal.
An original announcement suggested the tribunal had finally dismissed Worley of wrongdoing, and as far as shareholders could tell, that was the end of it.
At least, that’s according to the Australian Financial Review, which spearheaded a write-up into the matter – especially when Worley then released an amendment to its original claim.
Overall, Worley’s year-to-date (YTD) returns were down 10.42 per cent; bringing overall 1-year returns down to a paltry 1.10 per cent for shareholders.
Over the last month, the stock has shed 6.85 per cent.
But today, Worley clapped back at a please-explain from the ASX, outlining its view it’s done nothing wrong.
How Worley sees it
Responding to a request for information from ASX compliance on January 12, Worley has today told shareholders the tribunal itself wrongly made its decision public, seemingly on a whim, which is what led to Worley’s perceived embarrassments.
The company said it released the first announcement saying the matter had been resolved late last year on the first trading day it could after the tribunal’s decision was made during the holidays.
According to Worley, that first announcement was deliberately non-forthcoming about the technicalities of the tribunal decision because it was confidential.
Worley, in its view, was just trying to do the right thing. But the tribunal itself, three days after the first announcement, then made the decision public.
It was this action – and journalists then reading that decision to produce media reporting “which contained inaccuracies” on how material the findings were to Worley’s earnings – that caused it to then turn back around and release a second announcement to the ASX explaining it has been accused of corruption.
Regardless, Worley was still firm in its stance today.
The company told the ASX it did not consider the decision material due to it coming from an “arbitral tribunal” and not a court or regulator; that it “strongly” contests allegations of corruption made by the tribunal; that Worley is currently assessing legal opinion on an appeal, and, the overall penalty was not that major.
The Ecuadorian tribunal in question “unilaterally and contrary to its confidentiality obligations made the decision available”, in Worley’s view. If the company does launch an appeal, one can’t help but think this is probably an arrow they’ll add to the quiver.
WOR shares were down half a per cent, trading at $15.64 at 1:28 pm AEDT.
