In the shadow of Brazil’s once-mighty oil giant, another state-run behemoth is trying to get ahead of the nation’s biggest-ever corruption scandal to avoid the fallout that has already crippled more than a dozen companies.
A team of lawyers and specialists hired by Centrais Eletricas Brasileiras SA, known as Eletrobras, started reviewing Latin America’s biggest electric utility in June to determine whether it has had any losses from graft, according to a regulatory filing. Since then, the internal probe has swelled to involve more than 100 investigators, $15 billion of investments, 10 subsidiaries and three of Brazil’s biggest power projects, said a person with direct knowledge of the matter.
Until Eletrobras can put a price tag on the cost of possible corruption at the company, its auditor, KPMG LLP, is refusing to sign off on its 2014 financial report, as required by the U.S. Securities & Exchange Commission, said the person, who asked not to be identified speaking about a private matter. The inquiry at Eletrobras — and other offshoots like it that are just getting started — threaten to add years more to the 21-month-old scandal that began at the state-run oil producer known as Petrobras. The larger federal investigation has already helped tip Brazil into its worst recession in a quarter century and paralyzed the nation’s political institutions.
Brazil Energy Insight 
Leave a comment