Police extended Brazil’s biggest corruption investigation to executives of Latin America’s largest utility in another chapter of a scandal that has shaken the country’s political and business elites.
Federal police on Tuesday detained Othon Luiz Pinheiro da Silva, currently on leave of absence as chief executive officer of Eletrobras Termonuclear SA, the nuclear venture of state-run utility Centrais Eletricas Brasileiras SA.
The arrest was part of a wider operation in five Brazilian cities, prosecutor Athayde Ribeiro Costa said. Investigators are looking into allegations the executive received bribes from construction companies including Andrade Gutierrez SA and Grupo Engevix for contracts to build a nuclear plant, he said.
Andrade Gutierrez, Brazil’s second-largest builder, said its lawyers are analyzing the decision before making comments. Engevix’s press department said the company is providing all necessary clarifications to the authorities.
Eletrobras, as the utility is known, said it’s seeking information on the case while it continues an independent internal probe led by law firm Hogan Lovells US LLP on operations including the Angra 3 nuclear plant. Helton Pinto, a lawyer representing Silva, didn’t reply to a phone call seeking comments.
What started as the limited investigation of a reputed Brazilian money launderer has morphed into one of the region’s most resounding scandals, with executives turning state’s witnesses to allow authorities to present new allegations.
The case has helped knock down President Dilma Rousseff’s approval rating, with about 6 of 10 Brazilians saying they favor her impeachment in a poll this month.
Carwash Probe
The yearlong probe, known as Carwash because police discovered that a service station had been used to launder cash, has in recent months extended from oil producer Petroleo Brasileiro SA to construction companies and politicians.
The investigation has reduced cohesion in Congress, Standard & Poor’s said Tuesday, citing “political uncertainties” derived by the investigation among reasons for changing Brazil’s credit outlook to negative. On Friday, federal prosecutors formally accused executives from the country’s top builders of being part of the scheme.
“Corruption in Brazil is endemic and it’s in metastasis process,” prosecutor Costa said. As part of a phase of Carwash called “radioactivity,” police also arrested the head of Andrade Gutierrez’s engineering unit, Flavio Barra, on Tuesday, police chief Igor Romario de Paula said at a press conference.
He said the new phase is based on testimony given by Dalton Avancini, a former president of Camargo Correa SA, who earlier this month was among the first builder executives to be sentenced in the case.
Seeking Testimonies
Police also carried out orders to seek testimonies from executives of Odebrecht SA, Queiroz Galvao SA and Italy’s Techint Group, Paula said.
Odebrecht said in e-mailed comments that Tuesday’s measures are “unjustifiable” given that its executives were always available to authorities, adding that the company never paid bribes for contracts. Queiroz Galvao said it’s cooperating with authorities and denied having made illicit payments.
Techint said in an e-mailed statement its Brazil engineering unit’s general director Ricardo Ourique Marques resumed normal activities after giving testimony to the police in Sao Paulo.
This month Eletrobras was sued in the U.S. by shareholders claiming it failed to disclose that Silva was caught up in the bribery allegations. The CEO requested a leave of absence during the investigation, the company said in an April 29 statement.
Yields on $1.75 billion of bonds due 2021 from the Rio de Janeiro-based company surged to over 8 percent on Tuesday, the highest in almost four months. Shares of Eletrobras in Sao Paulo declined 1.3 percent to close at 8.34 reais.
bloomberg.com
Federal police on Tuesday detained Othon Luiz Pinheiro da Silva, currently on leave of absence as chief executive officer of Eletrobras Termonuclear SA, the nuclear venture of state-run utility Centrais Eletricas Brasileiras SA.
The arrest was part of a wider operation in five Brazilian cities, prosecutor Athayde Ribeiro Costa said. Investigators are looking into allegations the executive received bribes from construction companies including Andrade Gutierrez SA and Grupo Engevix for contracts to build a nuclear plant, he said.
Andrade Gutierrez, Brazil’s second-largest builder, said its lawyers are analyzing the decision before making comments. Engevix’s press department said the company is providing all necessary clarifications to the authorities.
Eletrobras, as the utility is known, said it’s seeking information on the case while it continues an independent internal probe led by law firm Hogan Lovells US LLP on operations including the Angra 3 nuclear plant. Helton Pinto, a lawyer representing Silva, didn’t reply to a phone call seeking comments.
What started as the limited investigation of a reputed Brazilian money launderer has morphed into one of the region’s most resounding scandals, with executives turning state’s witnesses to allow authorities to present new allegations.
The case has helped knock down President Dilma Rousseff’s approval rating, with about 6 of 10 Brazilians saying they favor her impeachment in a poll this month.
Carwash Probe
The yearlong probe, known as Carwash because police discovered that a service station had been used to launder cash, has in recent months extended from oil producer Petroleo Brasileiro SA to construction companies and politicians.
The investigation has reduced cohesion in Congress, Standard & Poor’s said Tuesday, citing “political uncertainties” derived by the investigation among reasons for changing Brazil’s credit outlook to negative. On Friday, federal prosecutors formally accused executives from the country’s top builders of being part of the scheme.
“Corruption in Brazil is endemic and it’s in metastasis process,” prosecutor Costa said. As part of a phase of Carwash called “radioactivity,” police also arrested the head of Andrade Gutierrez’s engineering unit, Flavio Barra, on Tuesday, police chief Igor Romario de Paula said at a press conference.
He said the new phase is based on testimony given by Dalton Avancini, a former president of Camargo Correa SA, who earlier this month was among the first builder executives to be sentenced in the case.
Seeking Testimonies
Police also carried out orders to seek testimonies from executives of Odebrecht SA, Queiroz Galvao SA and Italy’s Techint Group, Paula said.
Odebrecht said in e-mailed comments that Tuesday’s measures are “unjustifiable” given that its executives were always available to authorities, adding that the company never paid bribes for contracts. Queiroz Galvao said it’s cooperating with authorities and denied having made illicit payments.
Techint said in an e-mailed statement its Brazil engineering unit’s general director Ricardo Ourique Marques resumed normal activities after giving testimony to the police in Sao Paulo.
This month Eletrobras was sued in the U.S. by shareholders claiming it failed to disclose that Silva was caught up in the bribery allegations. The CEO requested a leave of absence during the investigation, the company said in an April 29 statement.
Yields on $1.75 billion of bonds due 2021 from the Rio de Janeiro-based company surged to over 8 percent on Tuesday, the highest in almost four months. Shares of Eletrobras in Sao Paulo declined 1.3 percent to close at 8.34 reais.
bloomberg.com
No comments:
Post a Comment