December 16, 2014 / 6:18 PM / 4 years ago

Brazil prosecutor seeks indictment against former Petrobras CEO

RIO DE JANEIRO (Reuters) - Prosecutors in Rio de Janeiro said on Tuesday that they were seeking to indict the former chief executive officer of Brazilian state-run oil company Petroleo Brasileiro SA (PETR4.SA) and a leading local construction and engineering firm for fraud.

A view is seen of the Petrobras headquarter in Rio de Janeiro December 16, 2014. REUTERS/Sergio Moraes

To that end, prosecutors have asked a Rio de Janeiro state court to freeze the assets and provide access to the bank records of several former Petrobras executives. This list includes Jose Sergio Gabrielli, CEO from July 2005 to January 2012 and Renato Duque, the company’s former services and engineering chief.

Other lower-level executives are also under investigation for fraud.

Prosecutors said construction and engineering company Andrade Guitierrez conspired with the Petrobras officials to overcharge for work on a project to expand the oil company’s Rio de Janeiro research park and data-processing center.

The work under investigation by the prosecutors was carried out between 2005 and 2010. The cost of the fraud is estimated to be as much as 32 million reais ($11 million).

The move by the prosecutors comes as allegations of corruption at Petrobras rise. Indictments last week in Brazilian federal court in Curitiba, the capital of Brazil’s southern state of Parana, say company officials conspired with contractors to inflate the price of contracts and then kick back the excess to executives, politicians and political parties as bribes.

Gabrielli did not immediately respond to a request for comment.

Duque, though a press aide, said he had not been informed of the action, that all his actions were approved by the legal department of Petrobras and that he is available to respond to all questions from agencies investigating Petrobras.

An Andrade Guitierrez spokeswoman said in a statement that the company has not been informed of the action, that all contracts with Petrobras were made under legal contracting processes that the company is available to answer questions from all agencies investigating Petrobras and that it did nothing wrong.

Duque and former refining chief Paulo Roberto Costa were among 36 people, including 22 from construction companies, charged in Curitiba last week.

Nestor Cervero, Petrobras former head of international operations, was charged Monday along with Julio Camargo, a consultant for Japanese contractor Toyo Setal, for involvement in the bribery and kickback scheme.

Reporting by Roberto Viga Gaier; Writing by Jeb Blount; Editing by Lisa Von Ahn

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