March 29, 2016 / 2:35 PM / 3 years ago

U.S. probes Brazil's Odebrecht, Braskem for corruption -Valor

SAO PAULO, March 29 (Reuters) - The U.S. Department of Justice is investigating possible corruption in contracts among Brazilian petrochemical company Braskem, engineering conglomerate Odebrecht and the country’s state-run oil company Petrobras, a newspaper said on Tuesday.

Local daily Valor Economico said the Justice Department was focusing its investigation on whether the companies violated the Foreign Corrupt Practices Act in naphtha supply contracts since 2009 between Petrobras and Braskem, which has Odebrecht as a controlling shareholder.

Braskem has been the target of a shareholder suit filed in mid-2015 in the United States over the alleged release of false statements to shareholders.

Braskem on Tuesday said that its lawyers abroad were sharing information with the DOJ and the Securities and Exchange Commission about an internal investigation it opened last year.

Odebrecht said it had not been notified by the DOJ and would therefore not comment. The Department of Justice and SEC had no comment.

In morning trade on the Sao Paulo stock change, Braskem fell 1.6 percent. Braskem trades as an American Depository Receipt on the New York Stock Exchange, where the stock fell 2.1 percent.

Braskem, Latin America’s largest petrochemical company, has long relied on Petrobras to supply it with naphtha, the main feedstock that it uses for producing plastics and other petrochemicals.

Petrobras and Odebrecht are at the center of a wide reaching corruption investigation in Brazil that has jailed dozens of engineering company executives, former Petrobras directors as well as politicians and political party officials. (Reporting by Reese Ewing and Caroline Stauffer Editing by W Simon)

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