* Former president of Brazil shipyard under investigation
* Sembcorp Marine shares fall as much as 7.8%
* Probe part of Brazil’s ‘Operation Car Wash’
* Comes as firm struggling with falling profits (Adds analyst comment, background; updates share movement)
By John Geddie and Aradhana Aravindan
SINGAPORE, July 3 (Reuters) - Singapore rig builder Sembcorp Marine said on Wednesday that authorities had searched its shipyard in Brazil as part of an ongoing graft investigation, sending its shares sharply lower.
Sembcorp Marine said the search was in relation to investigations against former consultant Guilherme Esteves de Jesus, adding that the former president of the Estaleiro Jurong Aracruz shipyard, Martin Cheah Kok Choon, was also under investigation.
Reuters was not immediately able to contact de Jesus or Cheah for comment.
The probe comes as Sembcorp Marine is already struggling with falling profits due to a downturn in the global offshore and marine industry.
Sembcorp Marine said the investigations were related to ‘Operation Car Wash’ - a huge bribery case that has engulfed corporate and political sectors in Brazil for years.
“The Company has co-operated fully with the Brazilian Federal Police and provided materials within the scope of the warrant,” Sembcorp Marine said in a statement.
Sembcorp Marine’s shares fell as much as 7.8% in Singapore on Wednesday - on track for their biggest daily fall in 1-1/2-years - while Sembcorp Industries dropped 2.8% before paring some losses. The broader market was down 0.4%.
Rival Keppel Offshore & Marine, a unit of conglomerate Keppel Corp, agreed in late 2017 to pay a $422 million fine to resolve charges it bribed Brazilian officials.
Last month, Sembcorp Industries, its biggest shareholder, provided Sembcorp Marine with a S$2 billion ($1.5 billion) loan to help it retire borrowings as well as for working capital and general corporate purposes.
Sembcorp Marine could use some of that to pay off any potential fines, said Joel Ng, an analyst with KGI Securities.
$1 = 1.3559 Singapore dollars Reporting by John Geddie and Aradhana Aravindan; Editing by Michael Perry and Subhranshu Sahu