Petrobras hit with US class action suit

Reuters/BrasiliaBrazil’s state-run oil company Petroleo Brasileiro SA and some of its executives were hit with a US class action lawsuit by investors in $98bn of the company’s securities over an alleged kickback and bribery scheme.Petrobras has already been sued by several US investors who bought American Depositary Receipts sold by the company in New York. The latest case was filed on December 24 in Manhattan’s federal court by the Labaton Sucharow law firm on behalf of the city of Providence, Rhode Island, which invested in Petrobras.The lawsuit proposes to cover $98bn of securities Petrobras sold since 2010, and any judgment or settlement would benefit the investors who purchased those securities.Allegations include that the company made material misstatements about the value of its assets in bond offering documents.Such an allegation does not require proof that misstatements were made knowingly, and allows plaintiffs to name as defendants the Brazilian and international banks that managed the sale of those bonds.Unlike the previous class actions by ADR holders, the latest lawsuit also names as defendants Petrobras executives, including chief executive Maria das Gracas Foster. In Rio de Janeiro, a Petrobras spokeswoman said the company had not received a citation from the reported class action suit filed on Christmas Eve.On the Sao Paulo stock market, Petrobras’ shares fell 4.5% last week, pummelled by Moody’s placing its credit rating on review for a possible downgrade and news of the latest US class action suit.So far 39 people have been indicted on charges that include corruption, money laundering and racketeering in the Petrobras graft scheme that allegedly funnelled money to political parties, including Rousseff’s Worker’s Party and its allies in Congress.The case has shaken the government of President Dilma Rousseff, who served as chair of the Petrobras board for seven years until 2010. She has denied any knowledge of the scheme.On Monday, Brazilian President Dilma Rousseff said there was no evidence that Petrobras senior management was involved in the graft scandal. According to the Brazilian Federal Police the group under investigation moved more than $3.9bn (£2.5bn) in what police describe as “atypical” financial transactions.Brazilian courts have blocked around $270m in assets belonging to various suspects. Federal agents revealed contracts worth $22bn are regarded as suspicious.