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Top CEOs Of Construction Companies Arrested In Petrobras Corruption Scandal

|Includes: Petróleo Brasileiro S.A. - Petrobras (PBR)

CEOs of leading construction companies in Brazil arrested, as the federal investigation surrounding Petrobras drags on.

On Friday, Marcelo Odebrecht, head of Brazil's biggest construction and engineering firm, Odebrecht SA was arrested by police, on his alleged involvement in the corruption scandal that took place in Petroleo Brasileiro Petrobras SA.

Furthermore, Brazilian police also arrested Otavio Marques Azevedo, Chief Executive Officer of country's biggest construction firm, Andrade Gutierrez, as the investigation into the corruption scandal entangles contractors and builders.

Azevedo and Messrs. Odebrecht together with other executives were taken to Curitiba in Southern Brazil, where the investigation took place, as reported by Reuters.

According to a report, in Mr. Odebrecht absence the construction firm's Fiduciary Affairs & Governance head, Newton de Souza will hold the position of interim CEO.

As per the statement by Mr. Odebrecht, argue by the company on arrest of its Chief Executive was "unnecessary" as it was fully co-operating with the authorities. Both the officers haven't been charged up till now, and it is still not clear how long they would be in police custody.

The arrests took place related to the investigation called as "Operation Car Wash". Earlier in March 2014, federal attorney accused former company's official of functioning with a lobby on construction and engineering firms to run a contracts bribe scheme.

A federal attorney, Carlos Fernando dos Santos Limas, has no doubt that Odebrecht and Gutierrez controlled the lobby that increased the Petrobras contract value.

The investigation covering more than 15 months has caused an arrest of over 100 suspects, as well as former company's directors. The latest arrests has taken the investigation a step closer to the politics of the country, as Mr. Odebrecht has private ties with the former Brazil President, Luiz Inacio Lula de Silva.

A researcher at Eurasia Group, Cameron Combs told Reuters, "There is a larger connection between Mr. Lula and Mr. Odebrecht and we see [Mr. Odebrecht's] possible indictment as a big risk,"

During the presidency term of Mr. Lula, the Petrobras board was controlled by Dilma Rouseff, the Brazilian president. Ms. Rouseff has preserved her innocence, refusing any preceding knowledge regarding the corruption plan.

Proof against Odebrecht shows that the construction firm had used a "sophisticated way" to legalize money, and bribe executives, as per Sergio Moro, Federal Judge.

Involvement in corruption scandal has disturbed the construction and engineering industry, as most of them have lost Petrobras as a customer.

"The objective of the operation is to bring a clear message that the law applies to everyone, no matter the size of the company, its place in society or its economic power," Igor Romario de Paula, a police officer, informed Reuters.