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Image courtesy of Keppel.

Keppel Corporation confirmed Tuesday that it has cut ties with a representative accused of channeling bribes to Petrobras officials.

Keppel said that it has put its relationship with Zwi Skornicki on hold “pending determination by the relevant authorities” into allegations that Skornicki made illegal payments tied to contracts with either Brazil’s Petrobras or Sete Brasil.

Skornicki was reportedly arrested in Brazil on Monday, the company said.

“Keppel reiterates its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates, and will take all necessary steps to eradicate such conduct if discovered,” the Singapore-based company added.

According to Reuters, Brazilian authorities allege that Skornicki paid bribes to João Santana, a top political campaigner and former treasurer of the ruling Workers’ Party, in 2013 and 2014.

Former Petrobras director Pedro Barusco alleged in a Brazilian court last June that several shipbuilding companies, including Keppel FELS, paid brides to win contracts with Sete Brasil, a rig firm established to provide vessels to Petrobras.

Barusco, who also served as the director of Sete Brasil, also alleged that rig building firms used intermediaries to pay bribes to Sete Brasil in an effort to win contracts for 21 deepwater drilling vessels worth about $800 million a piece.

Keppel has refuted media reports claiming the company was involved in bribery and has denied any wrongdoing.

News of Skornicki’s arrest comes weeks after Keppel disclosed that it took a $160 million fourth quarter writedown after not receiving payments from Sete Brasil for over a year.

The Singapore-based company said it received about $1.3 billion from Sete Brasil for six new rigs before milestone payments stopped.

The company added that it began slowing down construction work on the Sete rigs after it stopped receiving payments over a year ago.

Keppel halted construction work on all of the projects as of the end of 2015 and said it is waiting for “further clarity on the situation.”