Eight Former executives of PETROLEO BRASIL/RED PFD sh (NYSE:PBR.A) have been accused of corruption by a regulatory body in Brazil.
The eight former executives of the state-run company were charged with corruption allegations on Friday following a massive graft investigation that is almost going into its third year. The investigations were carried out by Brazilian watchdog CVM which is the South American country’s equivalent of the Securities and Exchange Commission in the U.S. The accusations are part of the Lava Jato or “Car Wash” scandal which has led to the arrest of numerous government officials as well as some of the executives that previously occupied high offices at the company.
José Sérgio Gabrielli and Maria das Graças Foster, former chief executives at Petrobras have also been tied to the graft investigations. Other executives that are also facing accusations include Paulo Roberto Costa, the former head of the company’s supply chain; Renato Duque, the former head of services; Ildo Sauer, the former head of gas and energy; Guilherme Estrella, the former head of exploration and production; Almir Barbassa, the former CFO and Nestor Cerveró, the former head of international business.
Some of the executives such as Roberto Costa and Duque that have recently been mentioned in the accusations have been previously convicted on different offenses related to corruption. However, the authorities did not release any public information immediately regarding how the legal proceedings will be handled after the announced accusations.
Meanwhile, Petrobras has agreed to pay $2.95 billion to U.S investors as compensation for the money that they lost when the scandals erupted and wiped off a significant part of the firm’s value. The settlement will mark the end of a legal battle that has been going on for the past three years.
The state-run firm has so far been involved in 14 different CVM investigations involving corruption. Things started going downhill for the company in 2014 after prosecutors uncovered a kickback scheme and money laundering activities within the firm. However, the recent accusations in which former executives have been mentioned started off back in March 2016.
Petrobras stock closed Tuesday’s trading session at $10.70.