Spreading like kudzu?
Late Friday, KBR, which Halliburton (HAL) has been talking about spinning off for much of 2006, filed its latest amended S-1. The filing, which weighed in at 358 pages, was nearly 100 pages longer than the amended S-1 filed just before Memorial Day weekend. But one of the things that popped out — thanks to help from 10k Wizard’s Compare Wizard feature — was this little item:
In addition, information recently uncovered suggests that, prior to 1998, plans may have been made by employees of The M.W. Kellogg Company to make payments to government officials in connection with the pursuit of a number of other projects in countries outside of Nigeria. Additionally, Halliburton has suspended the services of an agent that has served on projects outside of Nigeria and is actively reviewing compliance of an additional agent used in connection with a separate Nigerian project.
For those who haven’t been following this story all that closely, it’s the words "other projects in countries outside of Nigeria" that is new here. Indeed, Halliburton’s most recent filing on the subject — the Q it filed on July 28 — is a bit more circumspect, only mentioning that subpoenas have been issued "in connection with multiple projects over the last 20 years located both in and outside of Nigeria" but there’s nothing about payments being made in other countries outside of Nigeria. Also new in the Friday filing is the disclosure of issues with a second separate agent in Nigeria.
What to make of this latest disclosure? A quick skim of both Halliburton and KBR’s recent filings shows that the whole thing is pretty complicated and subject to numerous investigations both here and overseas. The KBR IPO has already been delayed and according to this Marketwatch story is now scheduled for April "dependent on market conditions". The real question for Halliburton investors is just how quickly the kudzu will grow between now and then.
UPDATE: Earlier today, I learned that David A. Smith, the former Halliburton employee who is alleging a cover-up at the company quoted footnoted.org in his latest SEC filing. So instead of writing about what’s buried in the filings, footnoted.org actually appears in one. Smith even suggests that Congress form a Kudzu Committee. Talk about turning the tables!