Petrobras CEO steps down amid corruption claims
Scandal hit Brazilian oil giant set to lose chief executive Maria das Graças Foster as she fails to put an end to corruption allegations during her three year rein
For a long time, Petrobras has been subject to allegations that it is a corrupt organisation. Evidence suggests bribes and illegal payments were taken under the rein of ousted CEO Graças Foster
The corruption scandal that has hit Brazil’s state-owned oil giant Petrobras is set to claim its biggest casualty as news emerges that CEO Maria das Graças Foster is due to step down within a matter of weeks. Talk of a potential replacement sent the company’s shares surging by 15 percent, the largest one-day increase for 16 years.
The news comes after a number of years of allegations against senior Petrobras executives and politicians over apparent bribes and illegal payments. These scandals have been rumbling on for almost a decade, and Graças Foster was appointed in 2012 with the mandate to root out any wrongdoing.
Confidence in the company has sunk
among investors
However, it seems that the corruption may have carried on under her leadership. In December, 35 oil executives were charged over apparent corruption, many of whom worked at Petrobras, with a number more following at the start of this year. According to authorities, kickbacks on contracts worth as much as $4bn may have occurred between oil executives and politicians at the ruling Workers’ Party.
Graças Foster has close links with recently re-elected Brazilian President Dilma Rousseff, who was previously chairperson of the oil firm until becoming President. Earlier this week, Rousseff’s government announced it would be postponing sales of global bonds in light of the corruption scandal.
Last week, Petrobras published its third quarter financial results for 2014 – two months after originally scheduled – but failed to reveal quite how much the corruption scandal had hit the oil company. However, independent auditor PricewaterhouseCoopers hadn’t even had a chance to properly audited this report. As a result, confidence in the company has sunk among investors, while ratings agencies Fitch and Moody’s recently downgraded the firm.
The news of a collapsing global oil price couldn’t have come at a worse time for Petrobras, will reduced revenues compounding the scandal. It is currently unclear who will be tasked with facing these challenges when Graćas Foster does eventually step down.
