I admire the tenacity of the Brazilian prosecutors…
Jan 9, 2020
The loss was almost R$5.5 billion in contributions from Petros, Funcef, Previ and Valia in the fund created by Sete Brasil. The company built platforms for pre-salt exploration.
Task Force Greenfield filed a new complaint against 29 people responsible for the management of the Petros, Funcef, Previ and Valia pension funds. They are accused of reckless management in approving investment in the Sondas Investment and Participation Fund (FIP) – the investment vehicle of Sete Brasil Participações. The company would be responsible for the construction of rigs, drilling units, which would enable the exploration of the pre-salt. The damage to the funds already amounts to approximately R$ 5.5 billion – the largest of all cases investigated by Greenfield. In addition to receiving the complaint and condemning the accused, the Task Force calls for the economic and moral reparation of the victims in an amount equivalent to three times the damage caused to the funds: more than R$ 16 billion.
According to the accusation, the crimes were committed between 2011 and 2012 and consummated by 2016, when the last contributions in the FIP Sondas occurred. Pension fund managers authorized the two-step investment in Sete Brasil. In this regard, the risks of investments, the financial market guidelines, the National Monetary Council, the internal regulations were ignored, and no feasibility studies were made on the contributions. Petros, Funcef and Valia continued to invest in FIP Sondas despite the delays in the first stage and increased risks.
According to Greenfield prosecutors, “by the time the second batch of 21 rigs were hired, there were already objective doubts about the ability to build, in a timely manner, the first seven rigs, which should be built at the Atlântico Sul Shipyard with the help of strategic partner Samsung. . At the beginning of 2012, there was already a delay in the construction schedule of the first rigs, which was further aggravated when the partner with expertise, Samsung, abandoned the project and sold its stake in the Shipyard ”, explain the prosecutors.
The company Sete Brasil emerged after the discovery of the pre-salt in 2006, when Petrobras found that there were not enough drilling units to meet the exploration demand. Someone had to be willing to build such rigs, taking the risks. Petrobras’ financial situation was no longer good and it was not convenient for the public company to contribute its own resources and assume the risks. It was Petrobras that sought out pension funds to invest in FIP Sondas, under federal government approval.
Investigations revealed that the choice of pension funds as investors led to short-term use of billionaire funds, “without further care and diligence, without much caution and without real concern about the fulfillment of the fiduciary duties expected of third-party capital managers.” .
Initially, Sete Brasil would be responsible for the construction of seven rigs. However, it was eventually hired to build the 28 rigs, divided into two stages. Pension funds should make contributions to the company between 2011 and 2019. It turns out that, due to mismanagement of the funds and Sete Brasil itself, the investments were anticipated, being fully contributed in 2016, without the conclusion of the project, resulting in losses of almost R$ 5.5 billion to the participants of the social security entities.
It is worth noting that the action only investigates the reckless management crime committed by the fund managers. If corruption is demonstrated, ie the receipt of any unlawful advantages received by managers, new legal action may be filed.