Latin America & Caribbean

Gates Foundation Trust sues Brazil oil company, Petrobras

A photo made available on 11 September 2015 of the State Brazilian oil "Petrobras" building in Rio de Janeiro, Brazil, on 01 July 2015. Image copyright EPA
Image caption Prosecutors say more than US$ 2 billion (£1.37 billion pounds) were paid over a decade mainly to Petrobras executives.

The Bill and Melinda Gates Foundation Trust has sued the Brazilian state-owned oil company, Petrobras for investment losses due to corruption.

The trust accuses Petrobras of misrepresenting its operations and financial situation to raise billions of dollars.

Prosecutors in Brazil are investigating Petrobras executives for involvement in a massive kickback scheme.

Petrobras has argued the scandal does not involve the company as a whole.

It has said the scandal was caused by contractors, corrupt politicians and a few employees and should not tarnish the company.

The trust said its portfolio managers had questioned Petrobras executives about its financial data, but were misled in a "series of materially false and misleading written and oral statements and/or omissions by Petrobras."

Huge difficulties

Petrobras is already facing a number of other US class-action lawsuits.

The scandal has caused huge political difficulties for the Brazilian President Dilma Rousseff, who is not under investigation and has denied all knowledge of the scheme.

Prosecutors have said more than $2bn (£1.32bn) of bribes were paid over a decade, mainly to Petrobras executives from construction and engineering companies.

Some of the money was then passed on to political parties including the governing Workers' Party.

On Monday, the former treasurer of the Workers' Party, was sentenced to 15 years in prison after being convicted of receiving bribes from Petrobras contractors and distributing them to members of the ruling party.

The trust is also suing Petrobras's auditors, a local affiliate of PricewaterhouseCoopers which it says played a key role in attesting to Petrobras financial statements.

Correction 29 September 2015: This report has been amended to clarify that the action is not being brought by the Bill and Melinda Gates Foundation but by the foundation trust, a separate body.

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