Brazil’s Three Largest Pensions Join Petrobas Lawsuit

Plans, workers look to recoup billions in “Car Wash” scandal losses.

Brazil’s three largest pension funds are joining an arbitration case against Brazil’s Petroleo Brasilerio SA (Petrobas), according to Reuters.

Petrobas said in a securities filing it had been informed that the Previ Caixa de Previdência ($9 billion-$15 billion), Funcef, and Petros Fundação (both between $3 billion and $9 billion) pension funds had joined the case, in which shareholders are demanding reimbursement for corruption scandal-related losses against the state-run oil company. The pensions represent Banco do Brasil, Petrobas, and state-bank Caixa Economica Federal employees, respectively.

The news was reported late Tuesday in the newspaper Valor Ecônomico.

“Petrobras reiterates that legislation does not support this initiative, and the company will defend itself to guarantee its interests and those of its shareholders,” the company said in a statement.

Although Petrobas noted that the three funds did not specify the amount of their claims, Valor reported that Petros estimated it could win between 4 billion and 7 billion reais ($2.11 billion).

The corruption scandal, known as “Operation Car Wash,” dates back to 2014, where former Brazilian President Dilma Rousseff—who served as the state-owned oil company’s chairman prior to her inauguration in 2011—was traced back to Petrobas and countless money laundering and corruption charges for which it was being investigated.  Believed to be the largest corruption scandal in modern history, Operation Car Wash not only forced Rousseff out of her political position along with a slew of Petrobas executives, but also nearly saw current President Michel Temer’s impeachment in October as well when Temer was found to be involved in the scam.

Fifteen other scandal-related companies are under investigation.

During this period, various pension funds, which include Previ Caixa de Previdência, Funcef, and Petros, as well as additional shareowners of Petrobas and other scandal-related companies, accumulated tremendous losses from Operation Car Wash.

The operation has included more than 100 warrants for search and seizure, temporary and preventive detention, and coercive measures. The money-laundering scheme is suspected of moving more than R$30 billion ($9.5 billion).

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