Trafigura Says Not Party to Storage Contracts in Petrobras Probe

  • Board member of commodity trading house arrested in Brazil
  • Swiss attorney general opens case involving Trafigura employee

Trafigura Group distanced itself from a board member arrested in Brazil over allegations of involvement in bribery and money laundering at state-run oil company Petroleo Brasileiro SA, saying the contracts at the heart of the case didn’t involve the commodity-trading house.

The “substantive allegations” made by Brazil’s public prosecutor against management board member Mariano Marcondes Ferraz “relate to certain storage contracts entered into between Petrobras and Decal do Brasil at the Porto de Suape,” Trafigura wrote in a letter sent to its banking partners on Nov. 2. Ferraz was a founding partner of storage and bunkering firm Decal and retains an equity interest in the company, Trafigura said in the letter seen by Bloomberg News.

“We note that Petrobras has (via its legal department) informed the public prosecutor that Trafigura was not party to these contracts,” Trafigura said.

The trading house dispatched the letter to its banks several days before the office of the Swiss attorney general said a “criminal case” had been opened involving a Trafigura executive and the Petrobras corruption probe known as Carwash. A spokesman for the attorney general declined to comment further on the investigation, first reported by Swiss newspaper Le Temps.

“From what we can gather from reading the prosecution documents and press articles, it seems that the substantive allegations against Mariano Marcondes Ferraz are arising from his private business relationship with Decal do Brazil,” a spokeswoman for Trafigura said in an e-mailed statement. “Trafigura has not been approached by the Swiss authorities in relation to these allegations.”

Setting Bail

Following a hearing on Nov. 3, Ferraz agreed to pay bail and remain in Brazil while authorities investigate his alleged involvement in the bribery scheme.

A judge in Curitiba, Brazil, accepted that Ferraz be released upon paying bail of 3 million reais ($930,000), according to the ruling made last week. Ferraz will have his passports withheld to prevent him from leaving the country, can’t change his address in Brazil and must cooperate with the investigation as part of the agreement, according to the ruling.

Ferraz, a management board member at Singapore-based Trafigura since 2014 and the CEO of company affiliate DT Group, was detained Oct. 26 on suspicion that he collected bribes and participated in corruption and money laundering. Federal police detained him at Sao Paulo’s Guarulhos International Airport as he prepared to board a flight to London. 

Ferraz was taken the following day to Curitiba, the base of the Carwash probe investigating a pay-to-play scheme where Petrobras executives accepted bribes, funneling money to politicians in exchange for favors. The judge and federal prosecutors overseeing the case are based in the city.

Bribery Allegations

A former executive with Marc Rich and Glencore Plc in Brazil, Ferraz joined Trafigura in 2007, according to his biography on Trafigura’s website. The Brazilian national has a residence in Geneva, according to website Local.ch.

With major trading operations in Geneva, Singapore and Houston, Trafigura is the second-biggest metals trader and third-largest independent oil trader, handling more than 4 million barrels of crude and petroleum products a day. Relationships with banks via short-term financing arrangements to fund operations are the lifeblood for trading houses.

Former Petrobras executive Paulo Roberto Costa has told investigators that Ferraz paid more than $800,000 in bribes from 2011 to 2013 to obtain contracts with the oil company, according to a statement issued by federal prosecutors when Ferraz was arrested.

A lawyer for Ferraz declined to comment on the case.

— With assistance by Yasmine Batista, and R.T. Watson

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