NEW YORK (TheStreet) --Petrobras-Petroleo Brasilier (PBR) , Brazil's state-run oil company, said a growing corruption scandal may implicate its employee pension fund and has led to a freeze on payments to 23 contractors allegedly involved in the scheme, Reuters reports.
Petros, the 66 billion real ($24 billion) employee-pension fund of Petrobras was singled out by an internal investigation, Petrobras said in a statement.
The law firms that are conducting the internal investigation "have found possible links to the facts that have been investigated" regarding the pension fund, according to the statement.
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It did not give details of any possible links, Reuters noted.
The investigation was launched after Brazilian prosecutors alleged that Petrobras executives conspired with construction companies to inflate the cost of contracts and then kick back proceeds to executives, politicians and political parties as bribes and campaign contributions, Reuters said.
Shares of Petrobras are up 1.93% to $7.41 in pre-market trade.
Sepaartely, TheStreet Ratings team rates PETROBRAS-PETROLEO BRASILIER as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETROBRAS-PETROLEO BRASILIER (PBR) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."