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CEO Of Brazil's Energy Giant Petrobras Resigns In Corruption Scandal Which Halted Sales Of Brazil Sovereign Debt

Tyler Durden's picture




 

Back in September 2010, Petrobras conducted what was then the largest share sale (to date) in history, when US$72.8 billion worth of shares in the company were sold on the BM&F Bovespa stock exchange. Upon its IPO, Petrobras became the fourth-largest company in the world by market capitalisation. Those days are long gone now, and following the triple whammy of a Brazilian economy in tatters coupled with plunging oil prices and an unprecedented corruption scandal, not only is its stock plumbing unseen ultradeep water depths, but Petrobras has rarely been in a worse shape than right now. Which is perhaps why moments ago the CEO of the semi-national company - which was the largest in Latin America by revenue as recently as 2011 - Maria das Graças Foster, "resigned" according to a filing with Brazil's securities regulator.

The WSJ had some more on the pre-story last night:

The chief executive of state-run oil company Petróleo Brasileiro SA is on her way out but will stay on at least until the company’s delayed audited third-quarter results are released, likely in a month, according to people familiar with the matter.

 

Chief Executive Maria das Graças Foster has for months been under mounting pressure from investors and opposition politicians to resign from her post amid a widespread corruption scandal.

 

That pressure intensified Tuesday when local media outlets reported that Brazilian President Dilma Rousseff had decided to replace Ms. Foster. Investors cheered the reports, sending Petrobras shares up more than 14% in São Paulo trading.

 

Ms. Foster, 61 years old, has been the CEO since 2012, and has offered her resignation to Ms. Rousseff at least twice. Ms. Foster and Ms. Rousseff met Tuesday at the presidential palace here, but neither addressed the media after the meeting.

 

Ms. Rousseff has backed Ms. Foster since the scandal came to light last March. The president had said that Ms. Foster was pushing changes to improve governance at the company. Petrobras recently set up an internal compliance division to prevent possible future misdeeds.

 

The official said that the government is looking for two new members for the board of directors, but denied reports that Petrobras is looking for a new CEO.

 

Another official close to one of Ms. Rousseff’s top aides said that the government is actively looking for a new Petrobras CEO.

According to Brazilian federal investigators Petrobras was at the center of a decadelong kickback scheme in which some of Brazil’s largest construction companies and several Petrobras executives colluded to drive up the price of Petrobras contracts and pocket the difference. As a result, three former Petrobras executives have been indicted, the company’s credit rating has taken a hit, and its management’s ability to weather the storm has been called into question.

Petrobras is working to put a dollar amount on just how much the inflated contracts cost the company, but left off an expected write-down last week when it reported its unaudited third-quarter earnings. Those results were originally due in November, but the company’s auditor has refused to sign off on them until Petrobras settles on a write-down.

It got so bad that as Reuters reported last night, Brazil's government actually halted global bond sales due to a widening corruption scandal at state-run oil company Petrobras, a member of President Dilma Rousseff's economic team said on Tuesday. "There's no window [for a foreign debt sale]," the source said on condition of anonymity because of the sensitivity of the government's plans.

Investor confidence in Brazil has been rattled by a growing fiscal deficit, stagnant economy and evidence of a price-fixing, bribery and political kickback scheme at the oil firm known as Petroleo Brasileiro SA.

 

Brazil's last foreign debt sale, in September, was a $1 billion reopened offering of dollar-denominated global bonds due in January 2025.

 

There are no plans yet for meetings between Brazil's economic policymakers and foreign investors, according to the government source. So-called road shows are often scheduled in advance of global bond sales.

Well, Brazil's bond sales can resume because as reported moments ago, the CEO has left the building:

Maria das Graças Foster, chief executive officer of state-run oil company Petroleo Brasileiro SA, and five other senior executives resigned on Wednesday, according to a filing with Brazil's securities regulator.

 

The board of directors of Petrobras, as the company is known, will meet on Friday to elect new senior executives, the statement said.

Now it's just a question of finding willing buyers.

 

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Wed, 02/04/2015 - 09:05 | 5742575 B2u
B2u's picture

Somebody needs to call Dimon or Buffet.

Wed, 02/04/2015 - 09:28 | 5742607 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

That upper-middle class / upper class (white) privilege isn't what it used to be.

Wed, 02/04/2015 - 09:43 | 5742641 shovelhead
shovelhead's picture

Haha.

You buying that crap?

What a maroon.

Wed, 02/04/2015 - 09:46 | 5742651 negative rates
negative rates's picture

Qualitative Easing out the door, more QE coming in.

Wed, 02/04/2015 - 10:01 | 5742716 Never One Roach
Never One Roach's picture

Happy Mardi Gras !

Wed, 02/04/2015 - 10:32 | 5742812 astoriajoe
astoriajoe's picture

She's latina, no?

Wed, 02/04/2015 - 09:29 | 5742611 disabledvet
disabledvet's picture

Buffet?

 

He's gotta unload a 100 billion railroad AND FAST!

Wed, 02/04/2015 - 09:46 | 5742655 negative rates
negative rates's picture

Upped his truckload did he?

Wed, 02/04/2015 - 09:49 | 5742659 shovelhead
shovelhead's picture

Doh!

Ya just can't trust anyone these days.

Wed, 02/04/2015 - 10:55 | 5742622 junction
junction's picture

If Petrobas needs an expert at padding construction contracts where nobody gets caught, former New York Speaker of the Assembly Sheldon Silver is your "go to" guy.  In New York, state funded construction contracts have always been crooked, with the winning bidder usually told to make a separate cash payment to a state official to seal the deal.  Then the contract price gets upped to cover the graft.

Wed, 02/04/2015 - 09:12 | 5742577 surf0766
surf0766's picture

See socialism isn't corrupt

Wed, 02/04/2015 - 09:29 | 5742606 GetZeeGold
GetZeeGold's picture

 

 

They clearly need to look to Venezuela for some answers....as they are now having to import oil there.

 

An oil producing country that now has to import oil.....oh yeah.....socialism rocks.

Wed, 02/04/2015 - 11:23 | 5742778 Arnold
Arnold's picture

Long Sugar Cane in Brazil.

http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil

Our alternative fuel heros ( in some minds ).

Could never happen in a democracy.   Oh..................

Wed, 02/04/2015 - 09:13 | 5742580 Catullus
Catullus's picture

According to Brazilian federal investigators Petrobras was at the center of a decadelong kickback scheme in which some of Brazil’s largest construction companies and several Petrobras executives colluded to drive up the price of Petrobras contracts and pocket the difference.

So... basically the Credit Mobilier Scandal.

https://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier_of_America_scandal

 

Wed, 02/04/2015 - 09:13 | 5742581 Oldwood
Oldwood's picture

Rats leaving the ship.

Wed, 02/04/2015 - 09:16 | 5742582 SethDealer
SethDealer's picture

hope some of the Brazialian babes Ive seen in movies immigrate to the USA!! no hablo ingles

Wed, 02/04/2015 - 09:54 | 5742681 taraxias
taraxias's picture

You better be careful, some of them have dicks......LOL.

Wed, 02/04/2015 - 12:48 | 5743300 smacker
smacker's picture

Try " Não falo Inglês. "

Wed, 02/04/2015 - 09:22 | 5742591 Quinvarius
Quinvarius's picture

Same old same old with a woman hired in at the top.  The tragic stories are endless.  Not owning pants is a qualification for nothing.

Wed, 02/04/2015 - 09:37 | 5742629 shovelhead
shovelhead's picture

Except for the Executive tampon dispenser.

Wed, 02/04/2015 - 09:26 | 5742603 cn13
cn13's picture

Is there anyone with integrity left in power?

Wed, 02/04/2015 - 09:52 | 5742676 shovelhead
shovelhead's picture

Your local Mafia boss.

Wed, 02/04/2015 - 09:52 | 5742677 Bernanke'sDaddy
Bernanke'sDaddy's picture

Sure.

 

They're governing Russia.

Wed, 02/04/2015 - 09:28 | 5742605 disabledvet
disabledvet's picture

I'm so hot for her

I'm so hot for her

I'm so hot for her

 

BUT SHES SO COLD!

Wed, 02/04/2015 - 09:33 | 5742618 29.5 hours
29.5 hours's picture

 

 

Resignations for malfeasance?! The good old American system mandating promotions and bonuses instead is demonstratively superior.

 

Wed, 02/04/2015 - 09:32 | 5742623 Billy Shears
Billy Shears's picture

These type of crimes are committed by politicians and bureaucrats only because they are not punishable by death. The crimes themselves can be considered a form of economic/financial treason.

Wed, 02/04/2015 - 09:52 | 5742671 Bernanke'sDaddy
Bernanke'sDaddy's picture

I agree.

 

The death penalty would word for high level white collar crime.

Wed, 02/04/2015 - 10:08 | 5742729 Never One Roach
Never One Roach's picture

I read somewhere the former laws mandated the death penalty in China for things like embezzling >$100,000. There were very few thieves in those days.

My, oh, my, have times changed.

 

 

Wed, 02/04/2015 - 09:35 | 5742626 shovelhead
shovelhead's picture

Broker:

"Sure. It's an overvalued, overleveraged, scandal-ridden piece of shit, but that's why you've got to get in early so you can make something off it before it all goes tits-up."

Wed, 02/04/2015 - 09:38 | 5742634 overmedicatedun...
overmedicatedundersexed's picture

sorry I thought this was about our jewish grandma yellen of the fed doing the perp walk, never to be alas

Wed, 02/04/2015 - 09:42 | 5742644 discopimp
discopimp's picture

I heard she resigned to take a teaching position at Hogwarts!  

Wed, 02/04/2015 - 09:53 | 5742675 negative rates
negative rates's picture

It's been confirmed too, at Jupiter Fla, she starts tomorrow.

Wed, 02/04/2015 - 10:00 | 5742684 Smegley Wanxalot
Smegley Wanxalot's picture

Her???

 

Oh yeah I get it now.  "her"  .... yeah sure ... hahhahaha.  Her!

 

 

And the next thing you know someone will call obama "him."

Wed, 02/04/2015 - 09:56 | 5742687 SmedleyButlersGhost
SmedleyButlersGhost's picture

WOW - is she the clever one or what? Not going for the plastic surgery until after she gets caught out. Jamie and the boys should have thought of that one.

Wed, 02/04/2015 - 09:56 | 5742694 iclouding
iclouding's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://goo.gl/ezLA00

Wed, 02/04/2015 - 10:23 | 5742780 SoDamnMad
SoDamnMad's picture

She is going to be the next president of the BRIC bank. Now we need to capitalize it.  We need 500 billion from each of us. Not a big problem with all this oil money.  Oh....

Wed, 02/04/2015 - 10:25 | 5742785 NoWayJose
NoWayJose's picture

Never send a socialist to do a Rockefeller's job. If she ran Standard Oil it would have been in the same shape.

Wed, 02/04/2015 - 10:37 | 5742835 Parafuso
Parafuso's picture

It's about fucking time.....

Wed, 02/04/2015 - 12:03 | 5743115 Shitgum Suicide
Shitgum Suicide's picture

Remember the old saying of how if women ran the world there wouldn't be any corruption or wars and shit like that? Well ladies I hate to tells ya, but you are just as rotten as your male counterparts.

I guess that's why Inthemix96 refers to most incredulous stories involving bad actors cunts.

However I would never use such a word to describe the ladies here.
MsCreant and Miffed command more respect than that.

Wed, 02/04/2015 - 12:22 | 5743192 walküre
walküre's picture

Brazil's Sarah Palin....

Wed, 02/04/2015 - 15:53 | 5744136 SmittyinLA
SmittyinLA's picture

Brazil wishes they had a Sarah Palin 

Wed, 02/04/2015 - 12:36 | 5743245 Wahooo
Wahooo's picture

If she got a haircut and a shave, she'd be a pretty good looking fellow.

Wed, 02/04/2015 - 15:56 | 5744130 SmittyinLA
SmittyinLA's picture

she looks eerily similar to Bruce Jenner, in fact I'd day she is where Bruce's journey ends

http://www.etonline.com/news/152091_bruce_jenner_shows_off_long_locks_at...

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