Updated for private equity dollar amount, eighth paragraph
Griffiths Energy International Inc., a company aspiring to go public but marred by an internal corruption investigation, has wrapped up its soul-searching mission.
But potential investors -- as well as existing private ones -- will find little comfort in a statement the company released Tuesday. Only three paragraphs of the 2,188-word (less boilerplate) press release are devoted to its bribery investigation.
“Over the past six months Griffiths has also devoted substantial financial resources to its internal investigation, which had the full support of management and the board of directors,” Gary Guidry, Griffiths chief executive said early in the statement. “Now that the work is completed, we can fully focus on advancing our operations in the Republic of Chad.”
The company did not provide any further hints about what it found, but did say it will hand over information to authorities it did not name.
“In November 2011, Griffiths Energy self-reported the initiation of an internal investigation to Canadian and U.S. authorities and committed to providing full co-operation and findings of the internal investigation to the authorities in due course,” the company said at the end of its update. “This investigation has been concluded and Griffiths Energy is in the process of sharing the results of the investigation with the appropriate authorities and does not intend to provide further public disclosure on the matter at this time. The investigation was supervised by a special committee of the board of directors and conducted by external legal counsel.”
Griffiths disclosed in November that the company had spent about $8.5-million in consulting deals, and it had launched an internal investigation to review about $2-million of those fees. Canada has been criticized around the world for a lax attitude toward global anti-bribery laws, such as the Corruption of Foreign Public Officials Act. The RCMP, however, have recently turned up the heat.
Griffiths, co-founded by the late Bay Street financier Brad Griffiths, who died in a boating incident before the company’s woes were disclosed, cleaned out its management and directors as part of its reform process.
The company wanted to raise $300-million in a public offering late last year. Its November regulatory filings for the initial public offering, however, disclosed the internal investigation, and potential investors didn’t bite. Instead, Griffiths cancelled the fundraising drive in February and turned to private investors, hoping for $200-million. The company was able to pocket $125-million in March.
It is unlikely its vague press release, which did not clarify whether it found evidence of bribery, will soothe potential investors. Information on oil prospects and pipeline plans are necessary, too, but it likely won’t be enough to turn Griffiths into a smash hit in the IPO market.