tuesday, 18 august of 2015

Brazil´s Eletrobras sued in U.S. court over corruption scandal

An investor in state-controlled Centrais Elétricas Brasileiras SA has filed a lawsuit that accuses Brazil´s largest power holding company and three of its executives of involvement in a graft scandal that artificially inflated stock prices, according to a court document.

The plaintiff, the City of Providence, Rhode Island, is seeking class action status for the lawsuit, which was filed in federal court in Manhattan on Saturday on behalf of holders of the company´s American depositary receipts. The company commonly known as Eletrobras did not have an immediate comment on the suit.

In the document, the City of Providence alleged that Eletrobras got ensnared in a massive bribery and corruption scheme that reached the highest levels of the company and Brazil´s government, the company´s controlling shareholder.

The document cited three large engineering projects - the Angra 3 nuclear reactor project as well as the Belo Monte and Jirau hydro power dams, - in which Eletrobras was involved that were detrimental to shareholders in recent years.

Eletrobras has repeatedly denied wrongdoing. Eletrobras ADRs gained 1.4 percent to $1.47 on Monday.

The City of Providence is a municipal corporation managing investments on behalf of beneficiaries including active or retired public employees and its dependents. The entity has bought Eletrobras ADRs since 2010, the document said.

Investors including the City of Providence also sued Brazilian state-controlled oil producer Petróleo Brasileiro SA , which is at the center of a corruption probe in Brazil known as "Operation Car Wash."

(Published by Reuters - August 17, 2015)

latest top stories

subscribe |  contact us |  sponsors |  migalhas in portuguese |  migalhas latinoamérica