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Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) Corruption Scandal Worsens

Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has still been dealing with the corruption scandal that hit the company last month. Recently, the Brazilian regulatory authority, CVM, interrogated the board members of Petrobras in relation to the case. The ex-finance minister of the country, Guido Mantega, is also being interrogated for the same reason. Alberto Youssef, the person convicted in the case, pointed to the Brazilian president, Dilma Rousseff, as having knowledge about the illegal developments.

Mr. Mantega has been accused in the case for misleading investors about the company’s fuel pricing. Additionally, current and former board members are also part of the interrogation. The two officials allegedly approved large debt targets, under the 2014-2018 plans for the company. The same officials then introducing pricing policies, which made it impossible for the company to achieve those targets.

Additionally, the policies also led to a loss of $19 billion, due to high buying rates, compared with low sell rates. So far the accused have failed to provide any valid reasons to the regulatory authority regarding the accusations. However, analysts believe that the moves were targeted at stopping inflation in the country, at a heavy cost to the investors.

Mr. Yousseff had been convicted on charges of money laundering has pointed at the current and ex-president of the country, as having prior knowledge of the developments at the company. Ms. Rousseff was the company’s chairperson at the time of the scandals, but has denied as having any part or knowledge about the developments. The announcement has led to unrest in the country as protestors call for the new president’s impeachment. Mr. Yousseff is also been accused of accepting bribes from Toshiba’s Brazilian wing to win contracts from Petrobras. Although the company is viewed as a victim in the proceedings, a number of its executives have been implicated in the scandal.

Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) closed at $9.76, after gaining 1.35% on May 12. The company has 7.44 billion shares being traded in the market, with a 52-week range of $4.90-$20.94.

Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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