ADIA Sues Petrobras Thanks to Operation Car Wash Results

Increasingly, sovereign funds are asserting their shareholder rights over listed corporations when it comes to possible material misstatements by firm management, which can drastically impact the value of a company security. Petroleo Brasileiro S.A. (Petrobras), Brazil’s gigantic state-owned oil giant, has been embroiled in a widespread political scandal that brought down the country’s first female president. A while back, Brazilian Federal Police conducted “Lava Jato Operation”, also known as Operation Car Wash, to take down the kickback schemes linking contractors to large companies to Brazilian politicians. The Abu Dhabi Investment Authority (ADIA) is major institutional investor in emerging markets like Brazil and Petrobras is one of the largest companies operating in Brazil.

On March 10, 2017, ADIA took legal action against Petrobras and Petrobras Global Finance B.V., the company’s Netherlands subsidiary that functions as a vehicle to raise funds for Petrobras through issuing debt securities in the international capital markets. The law firm Robbins Geller Rudman & Dowd LLP is representing ADIA in the lawsuit that was filed in the United States District Court for the Southern District of New York.

Securities

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