State-Controlled Oil Company of Brazil to Pay Almost $3bn As Settlement for US Class Action over Corruption

Andrés Franchi Ugart [CC BY-SA 3.0] via Wikimedia Commons

Petroleo Brasileiro (Petrobras), the state-controlled oil company of Brazil, has said that it will pay almost $3bn (£2.2bn) as settlement for a US class action that was brought by investors who said that a scandal over corruption affected the value of their investments.

After former executives were alleged of accepting bribes that are worth over $2bn in a period of over a decade, various shareholders sued Petrobras. The company, however, did not admit to any wrongdoing under the deal.

The company has said that it was a victim of the Lava Jato, or the “car wash” operation, which ultimately resulted in the downfall and impeachment of the President Dilma Rousseff.

A judge from the United States must still approve the said settlement.

Today, the company said: “The agreement, which is subject to approval by the court, is intended to resolve all pending and prospective claims by purchasers of Petrobras securities in the United States and by purchasers of Petrobras securities that are listed for trading in the United States.

“It eliminates the risk of an adverse judgment which, as Petrobras has previously reported, could have a material adverse effect on the company and its financial situation, and puts an end to the uncertainties, burdens and costs of protracted litigation.”

Petrobras said that it would pay the $2.95bn in two instalments of $983m and a last instalment amounting to $984m.

The company said that it had already recovered 1.475bn Brazilian reais, or around £336m, in restitution.

Petrobras said that it would “continue to pursue all available legal remedies from culpable companies and individuals.”

The deal arrived a few days after the securities regulator of Brazil formally accused eight former executives of Petrobras of corruption, including former Petrobras chief executives Jose Sergio Gabrielli and Maria das Gracas Foster.