Brazil oil giant faces $98bn shareholder lawsuit in US over corruption scheme
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Version 0 of 1. A US judge has told Petrobras bosses to prepare for a $98bn lawsuit over allegations that executives at the Brazilian oil company and senior politicians were involved in a huge money-laundering and corruption scheme dubbed “Operation Carwash”. Related: Brazil elite profit from $3bn Petrobras scandal as laid-off workers pay the price US district judge Jed Rakoff on Friday threw out Petrobras’s efforts to get the case dismissed and told the company and investors who are bringing the class action lawsuit to prepare for trial as soon as February 2016. Senior executives and Brazilian politicians are likely to be called to appear before the New York court, if the case gets the final go-ahead. Shareholders, led by the UK Universities Superannuation Scheme, which manages the pension funds of British academics, claim they lost billions as a result of the scandal which has been dubbed “Operation Carwash” because huge sums of money were allegedly laundered through a money exchange in a nondescript gas station in Brasília, the Brazilian capital. Jeremy Lieberman, a partner at Pomerantz Law, which is representing the claimants, said: “We look forward to aggressively litigating our case and working to achieve a substantial recovery for harmed shareholders – the true victims of the defendants’ fraud.” Petrobras said Judge Rakoff had dismissed only parts of the case and it would “continue working firmly in defense of its rights”. Rakoff said he would explain his decision in more detail soon. The investors, which also include the retirement funds of state workers in Ohio, Idaho and Hawaii, claimed in court filings that Petrobras was “rotten to the core”. The lawsuit claims that Petrobras executives accepted bribes for inflating the value of construction contracts and “used the money to bribe politicians through intermediaries to guarantee they would vote in line with the ruling party while enriching themselves”. The case has sparked the biggest corruption investigation in Brazilian history and led to the indictment of more than 40 Brazilian executives allegedly involved in the bribery scheme dating back to 2006. Corruption allegedly spread from the boardroom to politics – Brazilians took to the streets earlier this year to call for the impeachment of President Dilma Rousseff. She was chairwoman of the Petrobras board between 2003 and 2010, when most of the alleged corruption took place. Rousseff has denied any knowledge of the scheme and no evidence has linked her to the corruption. The Brazilian government owns the majority of Petrobras shares, and controls the company with seven of 10 seats on the board. Petrobras had called for the case to be thrown out because, it said, the company was also a victim of the scheme. “Petrobras itself was the victim in this scandal, carried out by a criminal cartel of Brazil’s largest construction and engineering companies,” the company said. |