US Judge Hears Investors Claiming to Be Defrauded by Petrobras

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:

You May Also Like

Brazil Embraer’s New Baby Flies on Alcohol

The Neiva Aeronautical Industry, a subsidiary company of the Brazilian airplane manufacturer Embraer, delivered ...

Brazilian Left Tries to Rally Behind a Scorched Lula

On June 19, the national directorate of the Workers Party (PT) of Brazil called ...

No Change in View for US’s Meddling in Latin-American Affairs

Few will find fault with the conclusion that U.S.-Latin American policy has long been ...

Brasília’s Governor Bad Season: Supreme Keeps Him in Jail and Impeachment Starts

Brazil’s Supreme Court on Thursday voted 9 to 1 to keep the governor of ...

Brazil: In the Backlands, Plump is Beautiful

The cactus dessert is a natural for making people forget things like diets. It ...

Brazilian born Francileudo plays for Tunisia national team

A Brazilian City Will be Rooting for Tunisia at World Cup

In a remote corner of the Brazilian Northeast, 51,000 people are not only going ...

Silencing Women with a Shot in Brazil

Virtually nothing is known about females who are murdered at the hand of Brazil’s ...

UN Gathers LatAm Leaders in Brazil to Accelerate Fight on Poverty

With three quarters of the world’s 852 million men and women who suffer from ...

Brazil Tourism: Gearing Up for Best Year Ever

A record number of tourists visited Brazil in August and expectations are that the ...

Sí£o Paulo, Brazil: Where the Fashion Meets

The 30th Fashion Meeting, which took place in São Paulo, is one of the ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`