WASHINGTON (BLOOMBERG) - Petroleo Brasiliero or Petrobras was accused in a lawsuit of hiding corruption and kickback schemes as the Brazilian oil giant induced a Washington firm's managed funds to invest more than US$221 million in an off-shore drilling business that's now foundering.
The EIG Management Co funds sued Petrobras in federal court in Washington over its failing oil drilling business, Sete Brasil. Brazilian government officials this month said the nation lacks the money needed to bail out the business.
Sete Brazil is the biggest customer of Singapore's two largest rig builders, Keppel Corp and Semncorp Marine, with orders totalling S$13.2 billion. Keppel has made a provision of S$230 million for projects awarded by Sete, while Sembcorp Marine has set aside almost S$330 million.
The Brazilian government's investigation of the so-called carwash bribery and kickback scheme has spanned four continents, touched the office of President Dilma Rouseff and had already prompted US lawsuits by Pacific Investment Management Coand the Bill and Melinda Gates Foundation.
Sete was founded to aid Petrobras in offshore oil exploration and drilling, and was originally led by senior and former officials of the state-run oil company, according to the complaint filed Tuesday.
"The public disclosure of the corruption scheme at Petrobras and Sete has crippled Sete by, among other things, causing the cancellation of Sete's contracts to lease drillships to Petrobras and causing the withdrawal by lenders of bank financing vital to Sete's operations," the EIG entities alleged. "The funds' investment in Sete is now worthless."
The EIG funds are seeking more than US$221 million in damages, according to the filing.