Petrobras CEO and five directors resign

Maria das Graças Foster

FEBRUARY 4, 2015 — Petrobras CEO Maria das Graças Foster and five other directors resigned today as a result of the corruption scandal enmeshing the Brazilian state-owned oil company. 

National daily, O Globo, reported that Ms Graças Foster’s departure was sealed during a meeting in Brasilia yesterday with President Dilma Rousseff on Tuesday, in Brasília.

For the moment, the only statement from Petrobras has been that its Board of Directors will meet Friday, February 6, to elect new Executive Board members “in face of the resignation of the CEO and five executive directors.”

Thus far the names of the five executive directors who have also quit have not emerged.

While Ms Graças Foster has not been accused of direct involvement in the scandal, she has been accused of ignoring tip-offs from internal whistleblowers. She has strongly denied this.

There have been waves of arrests in what investigators call Operation Lava Jato, or Operation Car Wash, which was launched in March of 2014.

Reportedly $8.9 billion in suspect transactions have been uncovered. Among those arrested have been Petrobras officials and the heads of some of Brazil’s largest construction firms — most of which have been involved with the rebuilding of Brazil’s shipbuilding industry and the accompanying creation of giant new shipyards.

Petrobras last week released its financial results for the third quarter ended September but, reports the Financial Times, was unable to quantify the extent of the losses from corruption. The FT report notes that external auditor PwC has refused to sign the accounts until there is more clarity on the financial impact of the scandal.