|Former CEO Marcelo Odebrecht|
Brazil’s current government and its largest contractor are trying to survive the latest episode in the country’s long-running construction bribery scandal. Market participants and observers are speculating on the future of Dilma Roussef’s government and contractor Odebrecht S.A. in the wake of a 19-year prison sentence a Brazilian judge gave the contractor’s former CEO Marcelo Odebrecht. The charges are linked to corruption and money-laundering charges in gaining work from Brazilian state-owned oil firm Petrobras.
Odebrecht and four other company executives left the firm last year after being arrested in the Lava Jato corruption probe. The executive, descendant of the company’s founder, has not said whether he will appeal the sentence or make a deal with prosecutors to reduce it. Raphael Figueredo, an analyst at São Paulo brokerage Clear Corretora, told Reuters that market watchers have been “paying close attention to every development of this investigation.”
Odebrecht executives say the firm is globally diverse enough to withstand impacts from the scandal. They told ENR last year that two-thirds of its work was outside Brazil. The firm employs about 107,000 workers in 18 countries. But tightening credit from banks to Odebrecht, as well as to other Lava Jato-investigated contractors, may force the firms to sell valuable stakes in infrastructure concessions. Odebrecht will not confirm any planned sales.
Meanwhile, hundreds of thousands of Brazilians demonstrated in early March to remove Roussef, who has been tarnished by the scandal, in what media say are the largest protests against her since she took office in 2011.