International
Coalition Announces Criminal Lawsuit Against Petrobras et al in
Spanish Criminal Court
Offers
International Investors Easy Access to Participation MADRID--(BUSINESS
WIRE)--The Asociacion de Afectados de Petrobras, a Madrid-based
shareholder association; International Securities Associations &
Foundations Management Company for Damaged Petrobras Investors
(Bolsa Madrid) Ltd. (“ISAF Petrobras”); and a coalition of
international law firms, including Cremades Calvo-Sotelo, Motley
Rice, and Lowey Dannenberg Cohen & Hart, announce that they
have prepared a substantial criminal complaint against Petroleo
Brasileiro SA, certain Petrobras group entities and (formerly)
high-ranking Petrobras officers (collectively, “Petrobras et al”)
and intend to file it in Criminal Court in Madrid in the coming
weeks. The complaint will be
filed on behalf of all Petrobras investors who bought shares
through Bolsa de Madrid (LATIBEX index) and all investors who
bought shares through BOVESPA in Sao Paulo but brought back those
shares to Spain clearing through Iberclear and kept and custodied
the shares in Spain thereafter, and suffered losses as a result of
the allegedly long-running fraud perpetrated by Petrobras et al.
Petrobras is majority-owned by the Brazilian government. The complaint will allege
that when years of complex fraud and bribery schemes orchestrated
by management and officials of Petrobras were finally revealed to
the public in 2014, investors lost billions of dollars, euros and
Brazilian reals, resulting from significant asset write-downs and
precipitous declines in Petrobras share prices. Petrobras shares are
listed on the BOVESPA in Sao Paulo and became subject to compliance
with European regulatory standards when Petrobras made its shares
available for trading and clearing via LATIBEX on Bolsa Madrid and
Iberclear, respectively, and subjected itself to compliance with
the Comision Nacional del Mercado de Valores (“CNMV”), the
regulatory body of Spanish financial markets. The CNMV is a member
of and subject to the regulations of the European Securities and
Markets Authority. Petrobras specifically
desired access to investors in European and other international
capital markets and promoted itself to them. To increase investors’
confidence, it declared its expected compliance with a
well-developed European market regulation system and its
willingness to be governed by it. Whether the Petrobras
shares are trading in Brazil or Europe, the security identifiers
for both the common and preferred shares are in fact the same in
each jurisdiction. Shares can be transferred back and forth for
custody between Brazil and Europe as a result of the CNMV
regulatory framework and the arrangement via Iberclear in Spain. Efforts are underway to
recover investor losses related to the revelations of allegations
of rampant corruption, money laundering, bribery and violations of
securities laws in multiple jurisdictions. The first investor
lawsuit was filed as a class action in the United States on behalf
of investors who purchased American Depository Shares on the New
York Stock Exchange, but is limited to only cover losses in those
ADS shares and certain US dollar denominated bonds. Importantly,
this US class action does not cover investor losses that stem from
the largest class of shares, which traded on the BOVESPA or
LATIBEX, and it will not cover losses on certain other bonds,
including Euro denominated bonds. Goals of the Legal
Action & How to Recover Losses Spain’s legal framework
does not have the concept of a securities class action as it exists
in the United States. Damaged Petrobras investor plaintiffs seeking
financial recovery must enter or “opt-in” to the collective
litigation to be entitled to participate in any settlement or
litigation-related proceeds. Additional goals of the collective
litigation include increasing the level of influence of independent
directors and safeguarding the interest of all stakeholders through
improvement in compliance standards and control measures, to a
level normally expected by international institutional investors.
It is important that investors (a) who purchased common and
preferred shares of Petrobras anytime between 2004 and July 28,
2015 and (b) suffered and/or are in danger of suffering (further)
damages as a consequence of the alleged fraud, contact ISAF
Petrobras so that it can determine eligibility to pursue claims in
the Spanish court system. Eligible damaged investors can join
Asociacion de Afectados de Petrobras with no upfront cost or risk. About the Shareholder
Association Association
Organizers. The Asociacion de Afectados de Petrobras, a
Madrid-based shareholder association, has appointed ISAF Petrobras
to interact with investors, law firms, service providers, and media
and to undertake all administrative tasks, including the collection
of client trading data, loss calculations, loss certification, and
all aspects of documentation handling. In addition, ISAF Petrobras
will finance all litigation costs, including legal fees, experts’
fees, processing, data collection, administration, and claims
administration, including potential payout administration. Apart
from this Spanish association, an affiliate of ISAF Petrobras –
International Securities Associations & Foundations Management
Company for Damaged Petrobras Investors (Bovespa) Ltd. – is fully
funding all efforts by Stichting Petrobras Compensation Foundation,
a Dutch-based foundation, to pursue restitution for damaged
investors. Law Firms.
Cremades Calvo-Sotelo, the pre-eminent Spanish securities law firm,
is cooperating with securities litigation firms Motley Rice and
Lowey Dannenberg Cohen & Hart. Cremades &
Calvo-Sotelo is considered one of Spain’s leading law firms,
specializing, amongst other fields, in collective securities
actions. Motley Rice is one of the largest plaintiffs’ litigation
firms in the United States, with a tradition of representing those
whose rights have been violated. Lowey Dannenberg Cohen & Hart
focuses its practice on complex litigation, including securities
and commodities litigation, antitrust litigation and healthcare
litigation. Claims Analysis and
Processing. Battea Class Action Services, LLC, an international
leader in the class action securities claims filing space, has been
retained to collect client data and process and validate investor
loss calculations. Damaged investors are
offered a “success only” contingency fee cost structure. By
accepting the contingency fees, the damaged investors are offered a
no-risk and upfront cost-free participation (“no cure - no pay”).
For more information,
please visit www.isafpetrobras.com
Contacts
Investor Access
Information
ISAF,
London, UK
+44 203 769 7223
or
ISAF, Rio De Janeiro,
BR
+55 212 018 1197
or
ISAF, Rotterdam, NL
+31
102 680 138
or
ISAF, Madrid, ES
+34 910 602
178 Info@isafpetrobras.com
or Media
Access Information
ISAF,
Stamford, CT, USA
Peter Hansen,
+1-203-252-3378 media@isafpetrobras.com
International
Securities Associations & Foundations Management Company for
Damaged Petrobras Investors (Bolsa Madrid) Ltd.
Release
Summary
An international
shareholder association has been formed in Spain to file criminal
charges against Petrobras and certain related parties in Spanish
Criminal Court.
Investor Access
Information
ISAF,
London, UK
+44 203 769 7223
or
ISAF, Rio De Janeiro,
BR
+55 212 018 1197
or
ISAF, Rotterdam, NL
+31
102 680 138
or
ISAF, Madrid, ES
+34 910 602
178 Info@isafpetrobras.com
or Media
Access Information
ISAF,
Stamford, CT, USA
Peter Hansen,
+1-203-252-3378 media@isafpetrobras.com
The ongoing corruption probe into Brazil's federal energy major Petrobras and its contractors will spawn opportunities in the country's electricity sector, according to a new BNamericas Intelligence Series report.
Among
those being investigated by authorities are executives at major local
construction firms with interests in electricity generation and
transmission projects.
"That
is a challenge for us, but it's also an opportunity to bring different
EPC contractors into the Brazilian market," AES Brasil's generation VP,
Ricardo Cyrino, said in the report.
Firms under investigation include OAS and Camargo Corrêa, both minority stakeholders in the Belo Monte mega-hydropower project under construction in the northern state of Pará.
The list also includes Odebrecht, whose power project pipeline totals 60GW of capacity and 5,700km of transmission lines; and Queiroz Galvão, which has a burgeoning hydropower and wind portfolio.
Many
of the firms have been banned from bidding for Petrobras contracts and
cut off from capital markets. The report said the situation has "created
a temporary gap in the construction services market for the power
sector."
Meanwhile,
a need to diversify Brazil's hydropower-dominant energy matrix,
reducing its vulnerability to drought, is expected to further buoy
investors. Those eyeing new opportunities include developers of natural
gas and renewable generation projects.
While wind
and biomass have already seen considerable growth, the country's nascent
solar sector is also showing signs of increased participation.
Power regulator Aneel
last year held its first auction for utility-scale solar projects and
more are planned. Likewise, distributed generation from rooftop solar
panels is on the rise, driven by new government incentives and higher
residential electricity tariffs.
"The electrical
system's current hydrological vulnerabilities will continue to afflict
the sector and push up prices, but they also create incentives for new
solutions and projects in all business segments of the power market,"
the report added.
The full report can be seen here.
The country's
government-run oil company, Petrobras, got crushed by low oil prices
last year. On Monday, it reported a net loss of 34.8 billion reais ($9.6
billion) for 2015, even deeper than its loss of 21.6 billion reais a
year earlier.
Petrobras is at the
epicenter of Brazil's scandalous political and economic crisis. An
investigation into a massive bribery scandal at Petrobras continues to
threaten Brazil's president, Dilma Rousseff, who is facing impeachment
proceedings, mass protests and plummeting support. Related: Brazil descends into chaos as Olympics looms
The scandal has played a key role in Brazil's recession, the worst in 25 years.
Petrobras' poor earnings come just days after Rousseff appointed her
predecessor, Luiz Ignacio Lula da Silva, as her chief of staff -- a move
widely viewed as an attempt to shield Lula from prosecution. In Brazil,
cabinet members can only be tried by Brazil's supreme court. A Supreme Court judge filed an injunction Friday, annulling Lula's appointment.
Thousands
of Brazilians protest against President Dilma Rousseff Sunday in Sao
Paulo, holding a sign that reads "Impeachment Now"
The investigation into Petrobras has already damaged Lula's once
impeccable legacy. He left office in 2010 with an approval rating near
90%. Prosecutors recently charged Lula with money laundering and
identity fraud.
They allege he accepted a vacation home from a
Brazilian construction company in exchange for helping the company get
favorable contracts with Petrobras. Lula has staunchly denied the
allegations. Related: Why Brazil is freaking out
Prosecutors have already jailed several politicians, corporate execs
and even billionaires tied to the Petrobras scandal. The company
announced last year that it lost over $2 billion just in bribes between 2004 and 2012.
On top of all that, Petrobras is suffering like everyone else from the
steep fall in oil prices. It said it had to write off billions of
dollars of assets and investments in 2015.
The company's market
value has gone down by more than $100 billion since the investigation
picked up steam in the fall of 2014.
Petrobras stock was worth
nearly $11 at one point in September 2014. Now it's worth $2.24 -- about
an 80% decline. One silver lining for the company: as oil prices have
rebounded across the globe, its stock has bounced up in 2016. But it's
still well below where it was before Brazil spiraled into chaos. -- Richard Beltran contributed to this report.
CNNMoney (New York) First published March 21, 2016: 9:42 PM ET
Brazil’s
stocks fell to the lowest since 2009 as raw-material producers
including Petroleo Brasileiro SA followed commodities lower and consumer
stocks tumbled amid estimates for a deeper contraction of Latin
America’s largest economy.
Petrobras,
as Petroleo Brasileiro is known, sank to the lowest since 2003. About
20 percent of the Ibovespa is made up of commodity companies, which have
been battered by a drop in raw-material prices amid a slowdown of the
nation’s top trading partner. Lender Banco Bradesco SA contributed the
most to the Ibovespa’s drop, and online retailer B2W Cia. Digital was
the worst performer on an MSCI gauge of companies that depend on the
domestic demand.
Brazilian shares have joined a plunge in global
stocks this year amid waning investor confidence in China’s efforts to
revive its economy and stabilize financial markets. Traders have also
pushed down the value of the Ibovespa on prospects the South American
nation will post the worst recession since at least 1901 as the
government struggles to shore up its finances and avoid further credit
rating downgrades.
“Prospects
for Brazilian stocks are discouraging in every way,” Hersz Ferman, an
economist at brokerage Elite Corretora, said from Rio de Janeiro. "There
are many uncertainties regarding both the internal and the external
scenarios."
The Ibovespa slipped 1.6 percent to 39,950.49 at the
close of trading in Sao Paulo. Petrobras extended this year’s slide to
9.1 percent. Crude declined to a 12-year low. B2W fell 4.3 percent, and
Bradesco lost 2.8 percent.
Economists covering Brazil forecast the
country will contract 2.99 percent this year, according to a weekly
survey by the central bank. That compares with a prior estimate of a
gross domestic product decline of 2.95 percent.
Since
March 2014, Brazil has been shaken by the revelations from Operation
Lava Jato (Car Wash), which exposed the Petrobras' scheme as the largest
corruption scandal ever reported in the country. On March 2016, two
years after the beginning of investigations, Lava Jato entered a new
phase, focusing on the alleged involvement of Luis Inácio Lula da Silva,
the nation's president from 2003 through 2010.
Brazil's political world, already strained by the investigations of
office holders, became even more tense after Senator Delcídio do Amaral,
a former Senate leader for the Workers Party (PT), was arrested in
November 2015 and in a plea bargain arrangement began citing colleagues
both from the government as well as from the opposition for alleged
involvement in the corruption scheme.
Political tension continued to rise in Brazil after the mass protests
on March 13 demanded for President Dilma Rousseff's impeachment and
more recently, when Lula, her predecessor, was nominated for a position
as a Minister in Rousseff's administration.
The Lava Jato (Car Wash) drama has starred national politicians
caught up in its spotlight, but the corruption under investigation began
and continued with two other sectors: Petróleo Brasileiro S.A.,
Brazil's semi-public national oil company, and the collection of mostly
large firms that do business with it.
The Petrobras scandal was an enormous matrix of secretive schemes in
which these three sectors have intertwined over the years in illicitly
channeling billions of dollars. It is important to analyze the entire
picture of actors involved in the scandal.
Image 1: Sectors involved in Petrobras' scandal
Image 2: How Petrobras' scheme worked ;
Petrobras, as Petróleo Brasileiro S.A. is known, is Brazil's most
important company. Sixty-four percent government-owned[i], it explores
for and extracts petroleum and natural gas in Brazil and abroad, refines
them into products, which it transports and markets, produces biofuels,
and distributes oil products and renewable energy fuels, among other
activities[ii].
The firm's businesses include thermoelectric, ethanol and biodiesel
operations and gas pipelines and fertilizer factories.[iii] In 2014
Petrobras estimated that oil and natural gas constituted 13 percent of
Brazil's GDP, crediting itself for most of that economic sector.[iv]
Petrobras is also a major sponsor of sports[v], entertainment and
cultural events.[vi] Construction and other contracts for Petrobras
business run into the billions of dollars annually, and it is within
this context that the scandal began.
The starting point for such a scheme was in 2004,[vii] as discovered
so far through the investigations carried out in Operation Lava Jato,
when large constructions firms, known in Brazil as empreiteiras,
organized an illegal cartel with the aim of landing overpriced contracts
with Petrobras for private benefits, what caused serious damage to
Petrobras' bottom line.
To maintain the cartel and guarantee that only member companies could
sign on to Petrobras' contracts, the empreiteiras operatives bribed
Petrobras' employees.[viii] Most employees who were offered bribes had
important positions in the firm or served on its board of directors;
others were subordinates.
The corruption entered the political sphere through the involvement
of public office holders who got favored individuals' jobs in Petrobras,
sometimes in key positions, and received money in return. Political
influence became heaviest in the giant company's supply, services and
international units.[ix]
Bribe money was not paid directly, but rather was channeled
discreetly through black-market financial operators known as doleiros[x]
(a term related to the U.S. dollars they used). Doleiros would receive
the money from the empreiteiras businessmen through offshore companies
and funnel it to the intended recipients.[xi]
The intricate and sophisticated scheme involved transactions inside
Brazil and abroad, involving foreign citizens and Brazilian nationals,
foreign and Brazilian companies.[xii] Among the companies through which
intermediaries laundered the money are Constructora Internacional del
Sur S.A and Deep Sea Oil Corp, which operate internationally.[xiii]
Operation Lava Jato reveals new updates daily. Although news mainly
concerns politicians targeted for their involvement, businessmen[xiv]
and Petrobras' employees[xv] have already been convicted for theirs
acts.
Image 3: Businessmen involved in Petrobras' scheme
Their convictions were easier for prosecutors to obtain than those of
suspects holding high political office in part because the latter enjoy
a privileged status (foro provilegiado). As previously explained,[xvi]
privileged forum is a type of status given to some high public officials
that only allows the Brazilian Supreme Court to prosecute them.
So Federal Judge Sergio Moro, who is leading the Lava Jato
prosecution, has legal authority to prosecute businessmen and Petrobras'
employees but not politicians with privileged status. According to
Deltan Dallagnol, coordinator of a taskforce for Operation Lava Jato,
this factor has caused interruptions and delays in the prosecutions of
allegedly corrupt public officials.[xvii]
Convictions of important businessmen include that of Marcelo
Odebrecht, CEO of Norberto Odebrecht, Brazil's largest construction
firm. Along with other businessmen and Petrobras' employees, he was
convicted by Judge Moro on March 8, 2016.[xviii] Like the corruption
scheme itself, the Lavo Jato investigations began with Petrobras and its
contractors and led to the political sector.
New revelations can come forward daily. Odebrecht and his convicted
employees recently negotiated a plea-bargaining agreement to reduce
their punishment.[xix] Because of the interlinked nature of the scheme,
developments are sure to emerge and continue to affect Brazil's already
unstable national political environment — already coping with severe
economic recession and its hosting of the 2016 Summer Olympic Games this
August in Rio de Janeiro.
[i] "Fatia de controle do governo na Petrobras sobe para 64%". G1. September 28, 2010. Accessed March 24, 2016. http://g1.globo.com/economia-e-negocios/noticia/2010/09/fatia-de-controle-do-governo-na-petrobras-sobe-para-64.html.
[ii] "Perfil". Petrobras. Accessed March 24, 2016. http://www.petrobras.com.br/pt/quem-somos/perfil/.
[iii] "Principais Operações". Petrobras. Accessed March 24, 2016. http://www.petrobras.com.br/pt/nossas-atividades/principais-operacoes/.
[iv] Nunes, Fernanda. "Com investimentos da Petrobras, petróleo
avança para 13% do PIB brasileiro". Estadão. June 17, 2014. Accessed
March 24, 2016. http://economia.estadao.com.br/noticias/mercados,com-investimentos-da-petrobras-petroleo-avanca-para-13-do-pib-brasileiro,1513541.
[v] "Atuação no esporte". Petrobras. Accessed March 24, 2016. http://www.petrobras.com.br/pt/sociedade-e-meio-ambiente/sociedade/atuacao-no-esporte/.
[vi] "Projetos patrocinados". Petrobras. Accessed March 24, 2016. http://www.hotsitespetrobras.com.br/cultura/projetos.
[vii] Macedo, Fausto, Fernanda Yoneya. "Petrobras é o segundo maior
escândalo de corrupção do mundo, aponta Transparência Internacional".
Estadão. February 10, 2016. Accessed March 24, 2016. http://politica.estadao.com.br/blogs/fausto-macedo/petrobras-e-o-segundo-maior-escandalo-de-corrupcao-do-mundo-aponta-transparencia-internacional/.
[viii] "Caso Lava Jato: Entenda o Caso". MPF. Accessed March 18, 2016. http://lavajato.mpf.mp.br/entenda-o-caso.
[ix] Ibid
[x] Ibid
[xi] Justi, Adriana, Bibiana Dionísio. "Justiça Federal condena
Marcelo Odebrecht em ação da Lava Jato". G1. March 8, 2016. Accessed
March 9, 2016. http://g1.globo.com/pr/parana/noticia/2016/03/justica-federal-condena-marcelo-odebrecht-em-acao-da-lava-jato.html.
[xii] Brandt, Ricardo, Fausto Macedo. "Lava Jato investiga elo de
offshores com Odebrecht e Andrade Gutierrez". Senado. Accessed March 30,
2016. http://www2.senado.leg.br/bdsf/bitstream/handle/id/512353/noticia.html?sequence=1.
[xiii] Ibid
[xiv] Coutinho Mateus, Fausto Macedo, Julia Affonso. "Em um ano, Moro
condena empreiteiros de esquema na Petrobras". Estadão. December 15,
2015. Accessed March 24, 2016. http://politica.estadao.com.br/blogs/fausto-macedo/em-um-ano-moro-condena-empreiteiros-de-esquema-na-petrobras/.
[xv] Dionísio, Bibiana, Adriana Justi. "Justiça condenada Zelada,
ex-diretor da Petrobras, a 12 anos de prisão". G1. February 01, 2016.
Accessed March 24, 2016. http://g1.globo.com/pr/parana/noticia/2016/02/justica-condena-zelada-ex-diretor-da-petrobras-doze-anos-de-prisao.html.
[xvi] Fuentes, Esther, Rachael Hilderbrand. "Potential Legal Immunity
in Corruption Charges Against Brazil's Former President". Council on
Hemispheric Affairs. March 18, 2016. Accessed March 19, 2016. http://www.coha.org/potential-legal-immunity-in-corruption-charges-against-brazils-former-president/.
[xvii] Vieira, Isabela. "Procurador da Lava Jato critica foro
privilegiado, que beneficia 22 mil pessoas". Agência Brasil. November
25, 2015. Accessed March 24, 2016. http://agenciabrasil.ebc.com.br/politica/noticia/2015-11/procurador-da-lava-jato-critica-foro-privilegiado-que-beneficia-22-mil.
[xviii] Bergamo, Mônica, Graciliano Rocha. "Marcelo Odebrecht é
condenado a 19 anos e 4 meses de prisão". Folha de S. Paulo. March 08,
2016. Accessed March 09, 2016. http://www1.folha.uol.com.br/poder/2016/03/1747575-marcelo-odebrecht-e-condenado-a-19-anos-e-4-meses-de-prisao.shtml.
[xix] Bretas, Valéria. "Secretária da Odebrecht negocia acordo de
delação premiada". Exame. March 08, 2016. Accessed March 24, 2016. http://exame.abril.com.br/brasil/noticias/secretaria-da-odebrecht-negocia-acordo-de-delacao-premiada. Esther Fuentes is a research associate at the Council on
Hemispheric Affairs (COHA) - www.coha.org. The organization is a think
tank established in 1975 to discuss and promote inter-American
relationship. Email: This email address is being protected from spambots. You need JavaScript enabled to view it..">coha@coha.org.
Associação internacional anuncia processo criminal contra a Petrobras et al no Tribunal Penal espanhol Associação oferece aos investidores internacionais acesso fácil para participação
Since
March 2014, Brazil has been shaken by the revelations from Operation
Lava Jato (Car Wash), which exposed the Petrobras' scheme as the largest
corruption scandal ever reported in the country. On March 2016, two
years after the beginning of investigations, Lava Jato entered a new
phase, focusing on the alleged involvement of Luis Inácio Lula da Silva,
the nation's president from 2003 through 2010.
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