Braskem Sued in NY Court over Petrobras Scandal

A Braskem SA shareholder has sued the Brazilian petrochemical producer, accusing it of being involved in a graft scandal that has engulfed key stakeholders Odebrecht and Petrobras and led to a selloff in Braskem's U.S.-traded stock.

 

Plaintiff Douglas W. Peters is seeking class action status for the lawsuit, filed in a Manhattan federal court on behalf of individuals or institutions that purchased Braskem's American depositary receipts between June 1, 2010 and March 11, 2015, according to court documents.

 

Braskem and four executives working for or linked with the company are accused in the suit of making "materially false and misleading statements regarding the company's business, operational, and compliance policies." Such allegations do not require proof that misstatements were made knowingly.

 

The list of defendants include Braskem Chief Executive Officer Carlos Fadigas and his predecessor, Bernardo Gradin. Marcela Drehmer, the chief financial officer of Odebrecht SA, Brazil's largest engineering firm and Braskem's controlling shareholder, was also named in the lawsuit.

 

Braskem, which has long-term contracts to buy naphtha from state-run oil company Petrobras, also a major shareholder and the epicenter of sweeping corruption scandal, declined to comment. The other defendants could not immediately be reached for comment.

 

More than 100 people have been indicted on charges including corruption, money laundering and racketeering in the investigation of an alleged cartel of engineering firms fixing prices on contracts with the oil company formally known as Petróleo Brasileiro SA.

 

Odebrecht's chief executive was arrested last month and accused by prosecutors of playing a leading role in the scandal.

 

Shares of Braskem slumped 4.8 percent in late afternoon trading in São Paulo, while ADRs shed 4.9 percent in New York on Wednesday. The shares are down about a fifth so far this year.