Paradigm pulls IPO

A self-declared admission of ‘improper payments’ to foreign intermediaries delayed the initial public offering. CEO John Gibson tells Oil IT Journal that market conditions made him withdraw the offer.

In a letter to the US Securities and Exchange Commission this month (SEC), Paradigm president and CEO John Gibson requested that the registration be withdrawn, signaling an end to the initial public offering (IPO). The IPO was registered last year (OITJ Sept. 06) hot on the heels of Paradigm’s $56 million acquisition of Earth Decision.

Justice department

The float was delayed earlier this year as Paradigm’s own due diligence revealed ‘improper payments’ made by Paradigm to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA). Paradigm voluntarily disclosed these to the US Department of Justice (DoJ), cooperated fully with the department and instituted ‘extensive remedial compliance measures.’

$1,000,000 fine

As a result of these mitigating factors, the DoJ agreed not to prosecute Paradigm, provided Paradigm satisfies its obligations under the agreement for a period of 18 months. Those obligations include: ongoing cooperation; further remedial steps, including the adoption of rigorous internal controls; retention of outside compliance counsel; and payment of a $1 million penalty.


Assistant attorney general Alice Fisher said ‘Paradigm’s actions in this matter, including voluntary disclosure and remedial efforts, are consistent with our view of responsible corporate conduct when FCPA violations are uncovered. Accordingly, the Department has resolved this case to permit the company to move forward on sound footing, governed by ethical business practices.’


John Gibson told Oil IT Journal, ‘These events relate to an earlier period when Paradigm was a smaller, foreign managed company. The due diligence and self disclosure has made us now one of the cleanest, most responsible companies in the marketplace. In the end, it was the changing market that decided us to withdraw. The subprime crisis in the US, the weakening dollar and our own growing international business and personnel made the board and I decide to take stock of the situation and look at alternatives. We are in a 30 day quiet period following the withdrawal so I can’t say any more right now.’


Companies cited by the DoJ include agents acting for Kazakhstan’s NOC, and CNOOC. Paradigm admitted to similar conduct in dealings in Mexico, Indonesia and Nigeria where representatives agreed to make $100,000—$200,000 payments to an agent acting for Nigerian politicians to obtain contracts with an NNPC unit.

No offers

We understand that Paradigm’s business is doing very well—which was confirmed by a global order from Chevron (more in next month’s issue). We also have it on good authority that there are currently no offers for Paradigm at the present time.

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