Another former Petrobras executive charged in Brazil scandal

Mon Dec 15, 2014 4:56pm EST
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By Caroline Stauffer

SAO PAULO (Reuters) - Brazilian prosecutors said on Monday they had filed criminal charges against another former executive at Petrobras (PETR4.SA: Quote)(PBR.N: Quote) and three other people for alleged involvement in a massive kickback scheme at the state-run oil company.

Nestor Cervero, former international director of Petrobras, is the second former executive at the company indicted since last week in a scandal that has become a major crisis for the government of recently re-elected President Dilma Rousseff.

Julio Camargo, a consultant for contractor Toyo Setal, and lobbyist Fernando Soares were charged along with Cervero with allegedly paying out $40 million in kickbacks to political parties, executives and contractors and accepting $13 million in bribes from Korean shipbuilder Samsung Heavy Industries (010140.KS: Quote), the prosecutors said in a statement.

The bribes helped secure a contract on a $586 million drillship off the coast of Africa and the scheme was repeated in the Gulf of Mexico, where Petrobras has oil exploration rights, the prosecutors said. Toyo Setal declined to comment and Samsung Heavy Industries (010140.KS: Quote) did not immediately respond to a request for comment.

The companies themselves are not charged with any crimes.

Edson Ribeiro, a lawyer representing Cervero, said his client "vehemently denies the alleged criminal acts." Lawyers for Camargo and Soares could not be reached for immediate comment.

Concern over the corruption scandal is driving shares and bonds of Petrobras to multi-year lows. Preferred shares of the Rio de Janeiro-based company fell 9.1 percent on Monday, touching their lowest level since 2005.

The team of prosecutors in Parana state vowed to expand their investigation last week after accusing 36 people, including executives from six of Brazil's largest engineering firms, with forming a cartel to funnel kickbacks to the ruling Workers' Party and its allies.   Continued...

The headquarters of Brazilian oil company Petrobras is seen in Rio de Janeiro November 14, 2014. REUTERS/Sergio Moraes