Antitrust body said ‘leniency agreement’ signed in September
SÃO PAULO—Brazil’s antitrust body said it signed a ‘leniency agreement’ in September with construction company Andrade Gutierrez SA and kept it confidential during the agency’s preliminary investigations into the company’s activities.
The agreement was signed as investigators looked into allegations the company colluded with rivals for a multibillion contract to build the massive and controversial Belo Monte hydroelectric dam, the antitrust body, known as CADE, said Wednesday. By signing a leniency agreement, a company consents to admit wrongdoing, stop the alleged wrongdoing, and work with authorities. In return, potential civil penalties may be reduced or eliminated, CADE said.
Each leniency agreement is only signed by one company. In a statement, CADE said it kept the current agreement secret to not risk interference with the investigation.
“There are many plea bargains being negotiated [in the investigation], proof yet being produced, people still being questioned,” he said.
CADE alleges that preliminary investigations indicate Andrade Gutierrez and its local peers Camargo Corrêa Group and Odebrecht SA formed a cartel managed by at least six high-level executives of those companies. The antitrust body alleges the negotiations between those firms to form the cartel started in July 2009, and in 2010 the anticompetitive practice was put in place.
CADE alleges the cartel lasted at least until mid-2011.
Camargo Correa reached a leniency agreement with CADE last year, over certain contracts of services provided for state run oil company Petróleo Brasilieiro SA, or Petrobras, and agreed to pay a fine worth 104 million reais as part of the accord, CADE said. Odebrecht declined to comment.
If found civilly culpable, the construction firms may have to pay fines worth up to 20% of their annual revenues, while individuals may be ordered to pay fines of between 50,000 reais ($14,686) and 2 billion reais, according to CADE.
The investigation and leniency agreement are part of a massive corruption probe known as ‘Car Wash,’ which is focused on corruption and bribes in contracts between Petrobras and construction conglomerates. Investigations, which started more than two years ago, have spread to others areas, such as power generation.
The Belo Monte dam on the Xingu River in the Amazon region is expected to be concluded at the start of 2019, with an estimated cost of 28.9 billion reais. It will have a generation capacity of 11,233 megawatts.
Write to Rogerio Jelmayer at email@example.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com
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