Odebrecht to sign $2 billion leniency deal in Brazil graft probe - source | Reuters - Firstpost
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Odebrecht to sign $2 billion leniency deal in Brazil graft probe - source | Reuters

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By Tatiana Bautzer and Leonardo Goy
| SAO PAULO/BRASILIA

SAO PAULO/BRASILIA Brazilian engineering conglomerate Odebrecht SA has agreed to plea bargains and a massive leniency deal under which it would pay around 7 billion reais ($2.1 billion) in fines for its role in Brazil's biggest corruption scandal, a person familiar with the matter said.The deals sent shockwaves through Brazil's political establishment as they could incriminate as many as 200 lawmakers for taking graft money from Odebrecht ODBES.UL, which prosecutors said had a department dedicated to bribery.If approved by the judge leading the "Operation Car Wash" probe into corruption at state-controlled oil firm Petrobras (PETR4.SA), the Odebrecht deal would be the world's largest plea and leniency agreement.The Salvador, Brazil-based company told Reuters it has no comment on "an eventual deal with the courts." A spokesperson for the prosecutor general's office declined to confirm any deal had been signed.A source close to the negotiations, however, told Reuters that more than 70 executives at Odebrecht, Latin America's largest engineering company, would sign plea bargain deals on Wednesday or Thursday.Under the deals, the executives would become states witnesses and provide prosecutors with details of bribes paid to executives of Petrobras and other state companies, plus kickbacks to dozens of politicians.A separate leniency deal for Odebrecht is almost ready and will be signed within a few days, said the source, who spoke on condition of anonymity due to the sensitivity of the matter.

A settlement figure of 7 billion reais reported by local media was broadly accurate, the source said, without confirming the amount. Such a deal involving admission of guilt by the company, return of embezzled funds and payment of fines, would allow Odebrecht to bid for government contracts again by lifting a suspension imposed after the Petrobras scandal broke in 2014.Reuters reported this month that the deal would exceed the record 2008 agreement in which German engineering company Siemens AG paid $1.6 billion to U.S. and European authorities for paying bribes to win government contracts.Prosecutors are expected to take months to take plea statements and verify their details, prolonging political instability caused by a corruption scandal that contributed to the removal of leftist president Dilma Rousseff this year.

Political turmoil in Congress could delay passage of fiscal reforms by new President Michel Temer and delay Brazil's recovery from its deepest recession since the 1930s.The price on Odebrecht's 7.5 percent perpetual bond KY054172443= jumped more than 1 cent on the dollar to 54 cents in midafternoon trading. At that price, yields slid to 14.05 percent from about 14.25 percent.Odebrecht has been accused by prosecutors of overcharging state-controlled oil company Petróleo Brasileiro SA and other state companies for contracts and paying bribes to politicians.

The agreement is key to the restructuring of the company's 110 billion reais in debt.Since August, law firm E. Munhoz Advogados has been advising the talks with banks and investors.Marcelo Bahia Odebrecht, Odebrecht's former chief executive officer and the scion of the family that owns the conglomerate, has been in jail since June 2015 and was sentenced to 19 years. The patriarch of the family-owned business, Emilio Odebrecht, is also making a plea statement to prosecutors. ($1 = 3.3560 reais) (Additional reporting by Anthony Boadle in Brasilia, Guillermo Parra-Bernal, Eduardo Simoes and Bruno Federowski in São Paulo; Editing by Andrew Hay and Jonathan Oatis)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Nov 24, 2016 04:45 IST

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