Providence, RI sues Petrobras
The U.S. city of Providence, Rhode Island, is suing Brazil's state-run oil company Petroleo Brasileiro SA and some of its executives for bond losses stemming from an alleged kickback and bribery scheme, a leading Brazilian newspaper reported on Friday.
The court case is the latest problem for Petrobras , whose stock price has recently fallen to its lowest in nearly 10 years as a widening corruption probe caused the company to delay the release of its third-quarter earnings.
Petrobras has already been sued by several U.S. investors who bought American Depositary Receipts sold by the company in New York.
According to O Estado do S. Paulo, one of Brazil's biggest selling newspapers, this is the first case seeking compensation for losses incurred in bonds issued by the company on international capital markets.
The paper said the lawsuit filed by Providence on Dec. 24 is also the first to cite Petrobras executives, including CEO Maria das Gracas Foster, as defendants.
Daily O Estado de S.Paulo said it had access to the 70-page suit filed in an unnamed New York court. However, it did not specify the amount of damages reportedly sought by Providence.
A Petrobras spokeswoman said the company had not received a citation in the suit reported by the newspaper.
According to the news report, the city of Providence asserts that Petrobras made misleading statements to the market, inflating the price of its assets as a result of kickback payments.
The city is seeking compensation for losses in bonds purchased between 2010 and 2014, when it says Petrobras issued about $98 billion in debt and stocks overseas.
Reporting by Walter Brandimarte
