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Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR.A) Sues Construction Entity

Brazilian oil company Petroleo Brasileiro Petrobras SA (ADR)(NYSE:PBR.A) has started taking legal actions against executives and contractors to seek repayment of funds purportedly stolen in a graft plan. The company filed civil complaints alongside federal prosecutors last week against construction company Mendes Júnior, after submitting a similar suit application on April 30 against Engevix. The state-run oil company is seeking total amount of $152 million in “material” damages and fines from the two companies, not including “moral” damages that will be decided over the course of the lawsuit.

The details

The lawsuit is Petroleo first step in an attempt to recoup some of the “overpayments” it wrote off last year pertaining to the corruption investigation. As per former executives and federal prosecutors who struck plea bargains in the legal course, a group of construction entities conspired to inflate contracts for big projects at the oil firm between 2004 and 2012.

The involvement

The legal department of Petroleo said that the company is taking all necessary steps for the full reimbursement of the losses suffered, including damage to reputation. Paulo Roberto Costa, former refining director of Petroleo and numerous executives of the two firms were named in the legal cases along with respective companies. A spokesman for Mendes Junior stated that his firm hadn’t been officially notified of the case and therefore denied to comment.

The measures

In coming weeks, Petroleo Brasileiro Petrobras SA (ADR)(NYSE:PBR.A) intends to file additional court cases against three more contractors, Galvão Engenharia, Camargo Corrêa and OAS that have been referred to in the probes. From those firms, the company will seek to recoup amount of almost 826 million reais. However, it is not sure if the contractors would be in a position to pay damages if Petroleo wins the case. The corruption scam has battered construction segment of the country and has suffered drastically from repeated credit rating downgrades.

Published by Lisa Ray

Lisa has a Bachelor of Arts in journalism from Purdue University and 3 years of experience in the publishing field.



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