Brazil’s state-controlled energy giant Petrobras signed an agreement to settle a securities class action lawsuit filed in federal court in New York that alleged shareholders lost money because of corruption at the company.
Petrobras made the announcement in a statement published on its website Wednesday.
The agreement is subject to approval by the court, Petrobras said.
The proposed settlement requires Petrobras to pay $2.95 billion in three installments — two installments of $983 million and a third installment of $984 million.
The first installment is payable within 10 days of the court’s preliminary approval of the settlement. The second is payable within 10 days of final approval of the settlement. And the third installment is payable six months after final approval or on January 15, 2019.
The class action lawsuit alleged that contractors overcharged Petrobras and kicked back the overcharges to Petrobras employees and politicians.
In August 2017, Petrobras said in an SEC filing that it wrote off $2.5 billion because of alleged corruption. The company said it had “overpaid for the acquisition of property, plant and equipment in prior years.”
Wednesday’s statement said “Petrobras expressly denies liability” and the settlement “does not constitute any admission of wrongdoing or misconduct.”
But the settlement “eliminates the risk of an adverse judgment” and “puts an end to the uncertainties, burdens and costs of protracted litigation,” Petrobras said.
Petrobras has so far recovered R$1.475 billion (about $453 million) in restitution in Brazil, it said Wednesday.
In earlier disclosures, Petrobras said it had been formally recognized as a victim of corruption under the Lava Jato investigation by the Brazilian Federal Prosecutor’s Office.
The company said last year it “entered into 37 criminal proceedings as an assistant to the prosecutor.”
Petrobras will “continue to pursue all available legal remedies from culpable companies and individuals,” it said Wednesday.
Richard L. Cassin is the publisher and editor of the FCPA Blog.