Peru to seek US$1bn in damages from Odebrecht

Tuesday, January 30, 2018

Peruvian prosecutors plan to demand 3.47bn soles (US$1.06bn) in damages from Brazilian construction and engineering group Odebrecht in what would be the biggest ever legal settlement in the country's history.

Special prosecutor Jorge Ramírez, who rejected the company's earlier offer of a blanket settlement of US$66mn, is seeking steeper damages from Odebrecht as part of a broadening investigation into the company's corrupt practices, state news agency Andina reported.

Start your 15 day free trial now!


Already a subscriber? Please, login

The case is focusing on three of Odebrecht's infrastructure concessions in Peru – the southern gas pipeline, the inter-oceanic highway (IIRSA) and the Chacas highway concession.

"We hope Odebrecht will have a change of attitude," Andina cited Ramírez as saying. "They need to think it over, and if they want to make amends, I hope they propose a larger amount [than US$66mn]."

Odebrecht, which in December 2016 admitted to paying hundreds of millions of dollars in bribes to secure contracts across Latin America, has been involved in Peru's largest infrastructure projects including the gas pipeline, IIRSA, the Olmos and Chavimochic irrigation ventures and power plants.

President Pedro Pablo Kuczynski last year ordered Odebrecht to pull out of Peru after the company admitted to having paid at least US$29mn in bribes to Peruvian officials from 2005-14. Peru awarded Odebrecht US$16.9bn in 23 contracts from 1988-2015.

Kuczynski, meanwhile, allegedly met at least five times with Odebrecht representative Jorge Barata in 2004 and 2005 while he was finance minister during Alejandro Toledo's administration, local media reported.

Juan Sheput, spokesperson for Kuczynski's Peruanos por el Kambio party, denied the meetings implied any favoritism towards Odebrecht in the award of infrastructure contracts.

Kuczynski narrowly escaped impeachment in congress last month on accusations Odebrecht hired investment funds linked to the president while he was serving in Toledo's cabinet. Kuczynski, a veteran investment banker, denies any wrongdoing even though Toledo faces an international arrest order on charges of bribe-taking and money laundering.

Kuczynski, however, agreed to meet at the presidential palace in mid-February with a congressional panel investigating the massive corruption case known as Lava Jato, in which Odebrecht and Brazil's state-run oil company Petrobras are the chief protagonists.