“Brazil's Braskem Must Face U.S. Lawsuit over Petrobras Scandal,” Reuters
March 31, 2017
Brazilian petrochemical company Braskem SA must face the main part of a shareholder lawsuit over its role in a massive bribery scandal that engulfed Brazil's state-owned oil company Petrobras SA , a U.S. judge has ruled.
In a decision made public on Friday, U.S. District Judge Paul Engelmayer in Manhattan said holders of Braskem's American depositary receipts may pursue claims that the company and former Chief Executive Carlos Fadigas defrauded them by concealing how bribery enabled the company to buy naphtha from Petrobras at below-market prices.
Naphtha is a key ingredient in petrochemicals, and the complaint said Braskem bought 70 percent of its naphtha from Petrobras.
“The core of the case was the naphtha pricing statements, and I am pleased to see that was upheld,” the investors' lawyer Steven Toll said in an interview. “The case will go forward.”