Brazils state-run oil company Petroleo Brasileiro SA vowed on Monday to fully investigate a money-laundering scandal that has rattled the companys shares and caused the biggest crisis to date for President Dilma Rousseffs government. In her first public comments since a former Petrobras executive was arrested in connection with the scandal last Friday, Chief Executive Maria das Gracas Foster said the company was taking steps to improve corporate governance and had hired legal consultants to investigate the allegations of graft. Petrobras delayed the release of its third-quarter earnings last week following accusations that millions of dollars of company funds were funneled illegally to political parties, including Rousseffs ruling Workers Party. We need to have the same respect for our internal governance as we need to have for our technical operations, Foster told a conference call with analysts. Foster addressed the corruption allegations as soon as the call began, without being prompted by participants. On Friday, Brazilian federal police arrested the former Petrobras executive and several leaders of powerful Brazilian construction and engineering companies. Petrobras preferred shares, the companys most-traded class of stock, fell 3 percent on Friday and another 0.5 percent early Monday. They are down 18 percent this year. Rousseff was chairwoman of the Petrobras board of directors for seven years through 2010, when much of the alleged corruption took place. While she has denied any role in the wrongdoing and is not facing charges, the scandal could further weaken her government at a time when it faces a slowing economy and falling investor confidence. Brazils currency weakened slightly on Monday to near 9-year lows, and traders cited nervousness over the Petrobras scandal as one cause. Analysts and traders warn that potential corruption-related write-downs could lead to Petrobras being stripped of its investment-grade credit rating. In a sign of the companys troubles, Petrobras said in a statement shortly before the call that it would miss its oil production target for 2014 - with output growing between 5.5 percent and 6 percent, short of its goal of 6.5 percent to 8.5 percent. Investors have been concerned that the worlds most-indebted major oil company risks a technical default on about $12 billion dollars in bonds if it doesnt report audited earnings by the end of the year. The corruption scandal is the latest in a string of set-backs for Petrobras. It has seen its market value fall by more than $200 billion, or about three quarters, since 2008. Investors have discounted its prospects after hundreds of billions of dollars spent on expansion failed to deliver promised oil and gas output. Rousseff, who won reelection on Oct. 26, has pledged a thorough investigation and said on Sunday that the case could help change Brazils culture of corruption. By Jeb Blount (C) Reuters 2014.
Posted on: Mon, 17 Nov 2014 15:46:16 +0000
Trending Topics
Recently Viewed Topics
© 2015