Braskem Snared In Corruption Probe

The corruption scandal engulfing Brazilian state oil company Petrobras may soon have its petrochemical affiliate, Braskem, in hot water as well. Allegations have surfaced in the Brazilian media that Braskem paid out bribes to get favorable terms for naphtha feedstock contracts from Petrobras in 2009. Responding to the reports, Petrobras acknowledged that its own internal investigations have turned up irregularities in its contracts. Braskem denies it has gotten contracts on favorable terms. Additionally, Braskem will hold an extraordinary shareholder meeting on Aug. 4 to replace Marcelo Odebrecht, the Braskem chairman who has been indicted for his role in an alleged conspiracy by Odebrecht S.A., the large Brazilian construction firm he runs, to overcharge Petrobras. Odebrecht S.A. controls Braskem; Petrobras holds a minority stake.