From the BBC:
The Bill and Melinda Gates Foundation has sued the Brazilian state-owned oil company, Petrobras for investment losses due to corruption.
The charity accuses Petrobras of misrepresenting its operations and financial situation to raise billions of dollars.
Prosecutors in Brazil are investigating Petrobras executives for involvement in a massive kickback scheme.
Petrobras has argued the scandal does not involve the company as a whole.
It has said the scandal was caused by contractors, corrupt politicians and a few employees and should not tarnish the company.
The Foundation said its portfolio managers had questioned Petrobras executives about its financial data, but were misled in a "series of materially false and misleading written and oral statements and/or omissions by Petrobras."
Petrobras is already facing a number of other US class-action lawsuits.
The scandal has caused huge political difficulties for the Brazilian President Dilma Rousseff, who is not under investigation and has denied all knowledge of the scheme.
Prosecutors have said more than $2bn (£1.32bn) of bribes were paid over a decade, mainly to Petrobras executives from construction and engineering companies.
Some of the money was then passed on to political parties including the governing Workers' Party.
On Monday, the former treasurer of the Workers' Party, was sentenced to 15 years in prison after being convicted of receiving bribes from Petrobras contractors and distributing them to members of the ruling party.
The Bill and Melinda Gates Foundation is also suing Petrobras's auditors, a local affiliate of PricewaterhouseCoopers which it says played a key role in attesting to Petrobras financial statements.
Larger shareholders should consider taking the same action in similar cases in Malaysia, given the slow enforcement, with often low punishment (if any). It would make future perpetrators think twice before cooking the books or making misleading statements. Also auditors should be more inclined to step up their game when they know that the chance of being sued by shareholders of the company they audit is quite high.
It's pathetic when fund managers complain about being lied to - part of your job is determining whether you can trust management...ReplyDelete
Well, there is only so much DD that a fund manager can do.ReplyDelete
I admit, it is a bit the American mentality, win I say nothing, lose I sue.
There are simply too many lawyers in the US looking for companies/people to sue.