Peru demands to approve asset sales from Odebrecht scandal

Peru demands to approve asset sales from Odebrecht scandal

Peru Economy & Policy Corporate & Sovereign Strategy Project & Infrastructure Finance

Any company found guilty of involvement in the Odebrecht bribery scandal in Peru will have to seek government approval to sell any of its assets in the country, President Pedro Pablo Kuczynski said.

Speaking in a nationally televised address, Kuczynski laid out a series of steps his government has taken in the wake of Odebrecht's admission that it paid more than $800m in bribes across Latin America including $29m in Peru.

The corruption scandal has reverberated throughout the region and ensnared some current and former government officials in a several countries, including Peru’s former President Alejandro Toledo

Funds from any government approved asset sale will first be used to ensure that any fines are fully paid, Kuczynski said on Sunday night.

He also said any company operating in Peru that has either been found guilty or admitted to corruption charges will not be allowed to transfer money out the country if it has not fully paid workers and any government fines.

"The seriousness of the situation," he said, referring to the Odebrecht scandal, "means we have to take firm action."

Among other steps, the president said he has issued a legislative decree prohibiting any company convicted of graft from winning a bid for a government contract. He also announced plans to triple the amount of funding for the attorney general’s office to investigate corruption allegations.

Kuczynski added the government has collected a $262m guarantee from Odebrecht after it terminated a contract with a consortium it led to build and operate the $6.5bn Gasoducto Sur Peruano (GSP) natural gas pipeline. "We’ll keep this money to maintain the project while we seek a new contract," he said.

Peruvian authorities are seeking arrest of Toledo, who was president from 2001 to 2006. He is accused of receiving some $20m in bribes from Odebrecht in exchange for awarding the company a major highway contract when he was in office. Toledo, who is a visiting scholar at Stanford University, has denied any wrongdoing but has refused to return to Peru after a Peruvian judge issued an international warrant for his arrest.

In a call on Sunday with President Donald Trump, Kuczynski asked the US leader to deport Toledo, according to Peru state news agency Andina. The White House confirmed the conversation between the two leaders but did not publicly comment on the Peruvian president’s deportation request.