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Petrobas to pay $2,95bn over corruption scandal


Brazil’s state-controlled oil company, Petróleo Brasileiro (Petrobas), has agreed to pay $2,95 billion to settle a shareholder lawsuit in the United States over a corruption scandal that has ensnared dozens of politicians and corporate executives, including two former Brazilian presidents.

Prosecutors, in a long-running investigation known as Operation Carwash, claimed that a small number of top officials at the company conspired with a group of other companies to overcharge Petrobas for construction and service work, receiving bribes in return.

The ensuing scandal and vast investigation has implicated dozens high-level figures like former President Luiz Inácio Lula da Silva and his successor, Dilma Rousseff. The current president, Michel Temer, and several of his close allies are also dogged by corruption allegations.

Petrobas officials believe nearly $3 billion in bribes were paid as part of the scheme, which allegedly included gifts of Rolex watches, $3,000 bottles of wine, yachts, helicopters and prostitutes.

The company said on Monday that it was a victim of the bribery scheme and had already recovered 1.475 billion Brazilian reals, or about $449 million, in restitution. Petrobas said it would “continue to pursue all available legal remedies from culpable companies and individuals.”

“The agreement is in the company’s best interest and that of its shareholders, given the risks of a verdict advised by a jury, particularities of U.S. procedure and securities laws, as well its assessment of the status of the class action and the nature of such litigation in the United States,” Petrobas said in a filing with the US Securities and Exchange Commission.

The company said that it would pay the settlement in three installments, but would recognise the total settlement as part of its fourth-quarter 2017 results. It said that the settlement did not constitute an admission of wrongdoing or misconduct and that it “expressly denies liability” in the agreement.

The deal would resolve all pending and prospective claims by purchasers of Petrobas securities in the United States and by purchasers of Petrobas securities that are listed for trading in the United States, the company said. The settlement still has to be approved by the United States District Court for the Southern District of New York.

Under the chief executive Pedro Parente, a former chief executive of the commodities trading firm Bunge Brasil, Petrobas has tried to clean up its image in the aftermath of the scandal.