Article: Dutch Class Action Against Petrobras Moves Forward
Law360, London (June 3, 2021, 6:25 PM BST) — Brazilian state-owned oil company Petrobras could be on the hook for billions of dollars after a Netherlands court gave investors permission to continue a group fraud suit, a litigation group announced on Thursday.
A district court in Rotterdam ruled in favor of international investors that have banded together under the Stichting Petrobras Compensation Foundation in a bid to force the company to cough up after the Brazilian firm’s market value plunged in the wake of investigations into the oil giant.
A copy of the court’s order wasn’t immediately available in English. But according to the International Securities Associations and Foundations Management Co., or ISAF, a group funding the litigation in the Netherlands, the order was handed down on May 26 in favor of investors from around the world who purchased Petrobras securities on a Brazilian stock exchange, known as B3, and linked markets in the European Union as well as certain bonds before July 2015.
An investigation by Brazilian authorities that began in 2014 found that billions of dollars in bribes and other payments had been dished out by contractors to Petrobras executives, politicians and business leaders in exchange for work at inflated prices. The company also agreed to pay $853.2 million in penalties to end a U.S. corruption probe.
The ruling rejects Petrobras’ attempt to get the case dismissed before having to argue its merits. Investors will now continue their case, alleging that Petrobras misled investors by making fraudulent statements about the company’s books and the level of corruption that had been uncovered by Brazilian federal law enforcement agencies in 2014 — the widely reported Lava Jato, or Car Wash, scandal.
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