Former Brazilian President Taken In For Questioning Over Petroleo Brasileiro SA Petrobras (NYSE:PBR)

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Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR)

Brazilian police have taken former Brazilian President, Luiz Inacio Lula da Silva, into custody for questioning on scandals involving Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR). There were already reports that an investigation into the allegations of corruption in the oil firm reached the corridors of power. The corruption charges, and malpractices have not only tarnished the company’s image but also hurt its balance sheet.

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Search And Arrest Warrants

The Police have also issued search and arrest warrants in the home town of the former President, Sao Bernardo do Campo. The recent operation involved as much as 11 arrest and 33 search warrants in a number of cities. Petroleo Brasileiro was dragged into the picture because the ex-president’s construction firm was alleged to have gotten one of the tainted contracts. Also, the ex-president’s fellow inmates and a few big shots and lobbyists were either convicted or being questioned for the scandal.

On Friday, Brazilian police indicated that they have commenced a new phase of the investigation. Local newspapers have also indicated that the police were raiding Lula da Silva’s homes and his son’s as well on the alleged connections with the scandal involving the big oil firm. His lawyer was not available to comment to the latest searches being conducted.

Prosecutors Widen Their Investigation

Earlier reports indicated that prosecutors have extended their dragnet into the scandal involving Petroleo Brasileiro. Already, one of its former Directors was given a 12-year sentence for money laundering and corruption. The reports also suggested that investigators were leaning on the former director to spill the beans on bigger culprits. In return, authorities were said to have offered a reduced sentence.

Petroleo Brasileiro officials were arrested during the investigation as prosecutors were suspicious about overcharging on contracts and that such money was used to pay bribes. The former President, who left office in 2011, denied all allegations earlier.

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