14 Jun 2019
Brazil’s Petrobras found suspicious activity in its oil trading business – and failed to stop it – six years before an alleged bribery scandal erupted in that unit in 2018, according to three people with knowledge of the situation and documents seen by Reuters.
A 2012 internal probe at the state-run oil company turned up more than two dozen instances in which traders in Petrobras’ Singapore office overpaid for fuel, the people said. Big oil companies frequently purchase and sell petroleum products, taking advantage of price differences to maximize profits. Some employees in 2013 recommended halting transactions with one particular fuel brokerage that had consistently sold fuel to Petrobras at above-market prices, according to the people.
But the deals continued at the behest of at least three senior company managers, the people said.
The little-known fuel broker – Seaview Shipbroking Ltd – was subsequently implicated by prosecutors in Brazil’s long-running “Car Wash” corruption investigation centred on contracting graft at Petrobras. Authorities say this latest chapter of Car Wash is just ramping up.
Prosecutors in December alleged in public documents that four of the world’s largest commodities trading firms – Vitol SA, Trafigura, Glencore PLC and Mercuria Energy Group – used Seaview or other intermediaries to funnel at least $31 million in bribes to corrupt Petrobras employees.
In return, prosecutors say, these insiders would buy oil and derivatives at inflated prices or sell at discounted prices, thus delivering outsized profits to the parties on the other end of those trades. Prosecutors allege such transactions were routine between at least 2011 and 2014 among some employees in the Petrobras trading unit, which has offices stretching across the globe.
Reuters was unable to locate active contact information for Seaview. Brazilian prosecutors investigating the brokerage have focused on Konstantinos Kotronakis, a former Greek consul in Rio de Janeiro. They allege Kotronakis used a Seaview bank account that he controlled in Luxembourg to administer kickbacks related to Petrobras fuel trades. Kotronakis has not been charged with a crime.
In Brazil, it is not uncommon for prosecutors to allege wrongdoing by suspects in publicly available documents – and cite evidence to that effect – without immediately charging those people. Prosecutors so far have charged 14 individuals, six of them former Petrobras employees, and have said more charges are coming.
A lawyer for Kotronakis said he was unaware of the Petrobras audit, and that his client was not one of Seaview’s owners.
Glencore, whose subsidiaries likely channelled bribes through Kotronakis, according to prosecutors, declined to comment on its alleged dealings with the businessman.
By Gram Slattery, Reuters, 13 June 2019
Read more at Reuters
Count this content towards your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet