On Monday, Petroleo Brasileiro SA, a state-run oil firm of Brazil vows graft probe that has caused its shares to drop, while burdening President Dilma Rousseff with the biggest political crisis there has been in his administration.
Maria das Gracas Foster, the company Chief Executive Officer (CEO) said on Friday during a meeting with other leaders that they had already hired legal consultants so as to investigate the graft allegations.
The company has delayed its third-quarter earnings report the previous week after accusations that Petrobas steadily overpaid for assets, including work by contractors. Prosecutors said the extra funds were re-routed to political parties such as Rousseff’s presiding Workers’ Party. Also the company’s board of director’s chairwoman until 2010, many of the alleged corruptions took place during Rousseff’s administration.
There was neither a denial nor confirmation of such conduct, but executives said that the company will review the value of assets, considering bribes as part of the buying price. This will result in the unavailability of fully audited results for the quarter until January ends.
The company’s preferred shares drop 3% on Friday, shedding additional 2% on Monday in Sao Paulo. Overall, shares have lost 25% this year alone. The U. S. -listed shares of the company drop 5.5%, which was considered the third most actively traded shares on the New York Stock Exchange (NYSE).
While Rousseff denied her role on such allegations, the scandal could weaken her regime further, facing a stagnant economy and declining investor confidence at the same time. Almir Barbassa, Petrobas Chief Financial Officer ensured the strengthening and expediting of the earnings report, vows graft probe and to cooperate with necessary investigations, so as to resolve the issue quickly.