US Judge Hears Investors Claiming to Be Defrauded by Petrobras

    Petrobras rig

    Petrobras rig Brazil’s state-run oil company Petrobras urged a U.S. judge to throw out an investors’ class action lawsuit claiming a multibillion-dollar bribery scandal overvalued it for years.

    Speaking at a hearing in federal court in New York, Petrobras lawyer Roger Cooper said the company itself was a victim of the fraud, which he said was orchestrated by a handful of individuals.

    But the investors filing the case, who claim US$ 98 billion of its stocks and bonds were artificially inflated by Petrobras overstating the value of some of its major projects, argued there is no way company executives could have been in the dark.

    “This is a vast fraud taking place possibly over two decades, and everyone is asking the court and the public to believe, ‘We didn’t know,'” said Jeremy Lieberman, a lawyer for the investors. “The question we would ask is: can they be serious?”

    The hearing on the lawsuit, filed in December, came amid the largest corruption investigation in Brazilian history into what authorities say was a years-long scheme involving price-fixing, bribery and political kickbacks.
    Petrobras rig Prosecutors have charged dozens of senior executives at a number of Brazilian companies sending shockwaves through the country’s economy and sending President Dilma Rousseff’s popularity to all-time lows.

    U.S. District Judge Jed Rakoff did not rule on Petrobras’ request but said he would do so within two weeks. The judge asked several questions during the hearing but did not indicate how he was leaning.

    Cooper told Rakoff that the company was unaware of the alleged fraud, even if a few high-ranking employees were involved. “The knowledge of those co-conspirators cannot be imputed to the company,” he said.

    The probe has continued to widen, with a prosecutor in Brazil saying on Tuesday it could extend to utility Eletrobrás and several foreign companies.

    Brazilian authorities last week detained the head of construction company Odebrecht SA, and the CEO of builder Andrade Gutierrez.

    A British pension fund, Universities Superannuation Scheme, is leading the plaintiffs, who seek to bring claims on behalf of anyone who purchased U.S. shares or bonds in Petrobras from January 2010 to March 2015.
    Petrobras in April took a US$ 17 billion write-down partially related to the bribery scandal. Lieberman said the investors remain skeptical that the losses tied to the scheme have been fully divulged. The company’s value has collapsed to approximately US$ 60 billion, after nearing US$ 300 billion in 2008.

    Rousseff in Washington and Silicon Valley

    Ambassador Carlos Antonio Paranhos, Secretary-General of Brazil’s Ministry of Foreign Relations, that Brazilian President Dilma Rousseff’s visit to the United States should mark a revival of bilateral political dialogue between the two countries. After alleged US spying on Brazil in 2013, Rousseff canceled a state visit to the country.

    According to Paranhos, the episode has been overcome and should not be raised again. He pointed out that the official presidential visit to the US will advance business partnerships.

    “We’ll be talking to business leaders to show that Brazil is taking the austerity policy and infrastructure investment program seriously. Brazil is interested in driving more US investment in this area and expanding exports to the US,” he said.

    Two weeks ago, Brazil’s government announced a new private concessions plan for projects in infrastructure and logistics worth about US$ 64 billion. During her visit to the US, Rousseff and her delegation will promote business opportunities to US business leaders.

    Another discussion according to Paranhos is on Brazil potentially joining Global Entry, a fast-track border clearance program for regular travelers (such as business people) arriving in the United States. Under the proposal, US authorities would pre-approve qualified travelers so they can simply show their passport to a scanner upon arrival. Negotiations to extend the system to Brazilians are well under way, according to Paranhos.

    The two countries will also sign a declaration on greenhouse gas reduction commitments as a contribution to the success of the UN Conference of the Parties on Climate Change (COP-21) in Paris in December.
    Dilma Rousseff will attend appointments with business owners in New York and a work meeting with President Barack Obama in Washington. The trip ends with visits to the headquarters of Google, Inc., NASA’s Research Center, and Stanford University in California. Her return to Brazil is on July 2.
    Mercopress/ABr

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Misguided Guide

    Brazil and the Brazilians, the book, gives an inaccurate and dated view of Brazil. ...

    Brazilian Congress Leaves for Next Year Decision on Doubling Their Salaries

    Brazilian congressmen have postponed the voting over their own salary increase for next year ...

    Brazil and the Mercosur Armed Forces

    Brazilian Army’s equipment is in very bad shape. Abandoned for years and without resources, ...

    Brazil on the Verge of Becoming World’s Largest Food Supplier

    The Brazilian food industry is doing well. As well as the country currently being ...

    300 Foreign Firms in Brazil’s Amazon Looking for Business

    Presidents Luis Inácio Lula da Silva, from Brazil, and Hugo Chávez, from Venezuela participate ...

    Brazilian soccer player Mané Garrincha

    Two Decades After His Death, Footballer Garrincha Still Moves Brazil

    On November 25, 2005, George Best, Britain’s iconic football genius and self-destructive prodigal son, ...

    Brazil’s Stagnant Revolution

    The Left born in the São Paulo ABC assumed Brazil’s presidency with a project ...

    Welcome to Hell

    In Nao Verás País Nenhum, the crime problems of today pale in comparison to ...

    Home cooking with pro Eng Tie Ang

    Her parents are Chinese. She was born in Indonesia. The US has been her ...