Boston, MA 11/23/2014 (wallstreetpr) – Authorities in Brazil were forced to fight back after a magazine alleged that the country’s president had a lot to do with the escalating scandal surrounding Petrobras. Dilma Rousseff press service has already lambasted Veja magazine for alleging that former Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) director Paulo Roberto Costa had sent the president some payments in 2009.
Veja Accused of Manipulation
Veja has found itself in trouble with the state-owned company for failing to produce documents to support the allegations. The magazine had alleged that Costa had written to Rouseff with a view of trying to blindside attempts by the federal accountability office to halt the construction of three refinery projects. Rousseff press service has already stated that the media remarks amount to journalistic ‘manipulation’.
Paulo De Costa illegal practice at Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) only came to light in 2014 after an investigation was carried out by the federal police and the justice department. The statement claimed that media was only trying to manipulate the facts by informing readers. The company’s former director has already stated he will not try to interfere with investigations into the state owned company.
Weeks into the election, Veja quoted detained dealer Alberto Yoseff, who alleged that Rousseff all along knew about the kickbacks scheme that saw the government scoop huge sums of cash. Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) was an underperformer for the past few years from highs of $70 a share in 2008 to the current trading margins of $10. In 2011, the company announced plans to invest $225 billion in developing its offshore fields operation the largest ever discovered since the 1976 Cantarell discovery in Mexico’s.
The government’s control of Petrobras has worked against the company’s fortunes over the years negatively affecting profit margins. The ongoing corruption scandal may cripple the company financially as write-downs entering into billions continue to ring bells. Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has already started operation on its offshore platform Cidade de IIhabela in the Santos Basin.
Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has one of the best charts in terms of recent times. The stock moved up in Friday’s trading session on rising volumes which is a positive sign and closed tad below its 20-Day EMA of $10.93 but RSI moving up and signaling a buy. One can go long in the stock with stoploss of $10.4 for a target of $11.2 and $11.5 in near term.