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Petrobras Faces Lawsuits

Petrobras Faces  LawsuitsPetrobras Faces  Lawsuits

A US judge ordered Petrobras, the state-run Brazilian oil company, to face class-action litigation by investors seeking to recoup billions of dollars in losses stemming from a bribery and political kickback scandal. In a decision made public on Tuesday, US District Judge Jed Rakoff in Manhattan certified two classes of plaintiffs, saying their claims are similar to be pursued as groups, Reuters reported. Petrobras, whose formal name is Petroleo Brasileiro SA, has been accused of inflating the value of more than $98 billion of its stock and bonds through years of corruption. Last April, Petrobras took a $17 billion writedown to account for overvalued assets. Prosecutors have also said more than $2 billion in bribes were paid over a decade, mainly to Petrobras executives from construction and engineering companies. The scandal has contributed to a plunge in Petrobras' market value to below $20 billion from nearly $300 billion fewer than eight years ago. Petrobras' fraud "has eviscerated billions of dollars in shareholder value, as well as hobbled the political and economic structure of Brazil", Jeremy Lieberman, a Pomerantz partner, said in a statement.

 

Financialtribune.com