Sector News

Petrobras Unit CEO Takes Leave of Absence Amid Corruption Probe

November 4, 2014
News
The chief executive of a key subsidiary of Brazilian state-run firm Petroleo Brasileiro SA said Monday that he is taking a 31-day unpaid leave of absence in the wake of a corruption probe that has delayed Petrobras from reporting third-quarter earnings.
 
Sergio Machado, the chief executive of Transpetro, Brazil’s biggest oil and gas transportation firm and an important Petrobras subsidiary, didn’t admit any wrongdoing in the statement, but said his leave of absence is a “gesture” to avoid any further delays in Petrobras’ earnings filing.
 
Petrobras was widely expected to report its third-quarter earnings on Friday, but auditing firm PricewaterhouseCoopers declined to sign off on them until Mr. Machado was dismissed, according to the O Estadao de São Paulo newspaper.
 
Mr. Machado was named in a statement to prosecutors by a jailed former Petrobras executive as paying a 500,000 reais ($200,000) bribe for a contract, according to testimony released by a federal judge released last month.
 
In the statement Monday, Mr. Machado called these allegations “slanderous” and “absurd.”
 
A Petrobras representative didn’t immediately respond to a request for comment. The company hasn’t yet provided an explanation for why it didn’t report earnings Friday. Brazilian companies have until Nov. 14 to report third-quarter earnings. A PricewaterhouseCoopers representative declined to comment.
 
The former Petrobras executive, Paulo Roberto Costa, was arrested in March on money laundering charges. Now under house arrest, Mr. Costa agreed to testify against his former company as part of a plea deal with prosecutors. He told prosecutors that more than a dozen politicians were involved in a widespread kickback scheme for Petrobras contracts, according to the federal testimony.
 
In previous statement Petrobras has said it is conducting its own internal investigation into the allegations, and last week the company hired two law firms to handle the investigations.
 
By Will Connors 
 

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