Brazil to suspend Indian COVID-19 vaccine deal as graft claims probed

RIO DE JANEIRO, June 29 (Reuters) - Brazil will suspend a $324-million contract for COVID-19 vaccine from India that has mired President Jair Bolsonaro in accusations of irregularities, the health minister said on Tuesday, following guidance by the federal comptroller, the CGU.

The deal to buy 20 million doses of Bharat Biotech's Covaxin shot has become a headache for Bolsonaro after whistleblowers went public with alleged irregularities. One health ministry official said he alerted the president about his concerns.

Bolsonaro, whose popularity has faded as Brazil's COVID-19 death toll climbed past 500,000, has denied any wrongdoing, saying on Monday he was not aware of any irregularities.

But thorny questions persist, and may pose problems for him ahead of next year's presidential vote.

Health Minister Marcelo Queiroga told a news conference his team would investigate the accusations during the suspension.

"According to the preliminary analysis of the CGU, there are no irregularities in the contract but, for compliance, the health ministry chose to suspend the contract," the ministry said in a statement.

CNN Brasil had earlier reported that the ministry had decided to cancel the contract.

Brazilian federal prosecutors have opened an investigation, citing comparatively high prices of about $15 a dose, quick talks and pending regulatory approvals as red flags.

In a statement, Bharat Biotech said it had followed a "step-by-step" approach for the regulatory approval and supply contract of its vaccine in Brazil, and had not received advance payments from the health ministry.

It added that the pricing of Covaxin had been set between $15 and $20 a dose for supplies to governments outside India.

The deal is also being probed by a Senate panel investigating Brazil's handling of the pandemic.

One leading opposition senator on the panel, Randolfe Rodrigues, filed a formal criminal complaint against Bolsonaro with the Supreme Court on Monday.

He asked the court to investigate why Bolsonaro "did not take any action after being notified of the existence of a giant corruption scheme in the Health Ministry."

($1=4.9403 reais)

Reporting by Gabriel Stargardter and Pedro Fonseca; Additional reporting by Uday Sampath in Bengaluru; Editing by Bill Berkrot and Clarence Fernandez

Our Standards: The Thomson Reuters Trust Principles.