A shareholder lawsuit is now adding to problems facing Golar LNG as it seeks to work out the issues with Hygo Energy Transition's initial public offering.
The case, filed in the US federal court for the Southern District of New York, is targeting the New York-listed LNG shipowner over its recent share-price slump after Hygo's chief executive, Eduardo Antonello, emerged as the target of a bribery probe.
"As a result of [Golar’s] wrongful acts and omissions, and the precipitous decline in the market value of company’s securities, [Zarabi] and other class members have suffered significant losses and damages," the shareholders said in the complaint.
Zarabi, represented by Gregory Bradley Linkh of Glancy Prongay & Murray, is seeking class-action status for his lawsuit. The action intends to represent all shareholders that acquired Golar LNG shares from 30 April to 24 September.
Over that period, shares fell by $3.28, or nearly a third, to $6.86, after news of Antonello's suspected behaviour spread internationally.
Golar LNG shares closed at $7.09 on 30 April.
After Golar LNG announced the spin-off of its downstream LNG assets into Hygo, a joint venture with Stonepeak Infrastructure Partners, shares rose to a peak of $13.91 on 18 September.
The $558m spin-off was expected to add significant value to Golar LNG stock, pushing its valuation as high as $19 per share by some analyst estimates.
Trading of Hygo shares on New York's Nasdaq stock market was expected to begin late last week, but the news pushed Hygo's debut back.
The bribery probe came to light last Wednesday after Brazilian federal police executed 25 search warrants in relation to the alleged bribes. The allegedly illicit payments are said to have totalled $40m and helped Seadrill, Antonello's former employer, secure a $2.7bn contract with Petorbras in 2011.
Severed ties
Seadrill formerly had connections to Golar through John Fredriksen, who backed both companies until he severed ties with former partner and Golar LNG chairman Tor Olav Troim.
Authorities have been investigating bribes paid to Petrobras for the past six years in an effort known as Operation Car Wash.
Golar LNG did not respond to requests for comment from TradeWinds.
In the aftermath of the search warrants, Golar said Antonello's alleged conduct predated his time with Hygo, but that the company was reviewing his conduct.
In his lawsuit, Zarabi cites Golar LNG's corporate code of conduct and ethics, which prohibits bribes, despite Antonello's employment by Seadrill.
In early trading on Monday, Golar LNG shares fell a further $0.53 to $6.26.
