Brazil's Petrobras Creates Special Committee

SAO PAULO--The board of Brazilian state-run energy giant Petroleo Brasileiro SA, or Petrobras, authorized the creation of a special committee that will serve as a reporting line for an existing independent internal investigation amid corruption allegations.

Petrobras said the committee will consist of three people, including Ellen Gracie Northfleet, former president of Brazil's Supreme Court. It will serve as a reporting line for the independent internal investigation firms Trench, Rossi e Watanabe, based in Brazil, and Gibson, Dunn & Crutcher, based in the U.S.

Andreas Pohlmann, chief compliance officer of Siemens AG from 2007 to 2010, also will serve on the committee. The third post will be assumed by Petrobras's chief of compliance, risk and governance, a recently created post. No one has been named to that position yet.

"This Committee will act independently and will have a direct reporting line with the board of Directors," the company said.

The special committee will be responsible for certain tasks, including the approval of the investigation plan.

It also will receive and analyze the information addressed by the investigation firms; assure the investigation independency, assuring that it isn't prevented or obstructed; analyze, approve and enable the implementation of the investigation firms' recommendations; communicate and authorize communication between the investigation firms and authorities, including regulators, regarding the investigation status, its results, as well as measures taken by the company.

Authorities in Brazil allege that Petrobras was at the heart of a money-laundering and kickback scheme in which a group of construction companies overcharged the oil firm for tendered contracts and paid bribes to certain Petrobras executives and local politicians.

Petrobras also is under investigation by the U.S. Securities and Exchange Commission and received a subpoena in late November in which U.S. regulators requested documents relating to the investigation. The documents will be sent following an internal investigation by the Brazilian and U.S. firms Petrobras hired to determine the extent of the allegations.

Write to Rogerio Jelmayer at [e-mail]

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