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Skanska in Brazil

In March 1999, Skanska acquired all of the shares in the Argentinean construction company SADE Ingeniería y Construcciones S.A. (SADE). At that time, this company was the second-largest construction company in Argentina with revenues of USD 370 M and operations throughout South America, including Argentina, Brazil, Chile, Peru and Venezuela.

In March 1999, Skanska acquired all of the shares in the Argentinean construction company SADE Ingeniería y Construcciones S.A. (SADE). At that time, this company was the second-largest construction company in Argentina with revenues of USD 370 M and operations throughout South America, including Argentina, Brazil, Chile, Peru and Venezuela.

Skanska Brasil secured its first contract with Petrobras in 2002. Brazil became Skanska’s largest market in Latin America and Petrobras its major client. Projects included construction of oil and gas refineries and power plants, and also the operation and maintenance of offshore platforms.

The construction projects for Petrobras in Brazil, and similar projects in other parts of Latin America, did not perform according to expectations and many projects were loss-making.

It was decided in 2012 that Skanska would close its infrastructure development business in Latin America. This activity was focused on developing, financing, constructing and operating concession toll roads.

In connection with its second-quarter report in July 2014, Skanska announced that losses in the Latin American operations would impact operating income for the quarter by SEK 500 M. It was thus announced that the Latin American operations would be significantly downsized. No more bids would be submitted for construction projects, and priority was given to the completion of projects that had already been contracted.

In March 2016, Skanska divested the final part of the former Skanska Latin America and since then, no projects have been carried out in Latin America.

Alleged ethical breaches by Skanska Brasil Ltda

Skanska takes the allegations of ethical breaches by Skanska Brasil very seriously and is continuing to closely monitor relevant developments in Brazil and, when necessary, investigate further. We are answering on requests for information from the authorities but cannot comment on ongoing investigations and proceedings. There is considerable uncertainty as to the outcome of these proceedings or when they will be concluded.

As announced in March 2015, Skanska Brasil became involved in investigations by the Brazilian Comptroller General (CGU) and the Administrative Council of Economic Defense (CADE). These investigations focused on corruption and competition matters in relation to certain Petrobras projects. In late 2015, these two government entities initiated administrative proceedings against Skanska Brasil and twenty other companies. In June 2016, CGU decided that Skanska Brazil was to be excluded from Brazilian public procurement for a period of no less than two years. This decision has been appealed. The CADE proceedings are expected to continue for another few years. CADE has the authority to impose fines for competition breaches and its decisions can be appealed. Two former Skanska Brasil directors are defendants in the CADE proceedings and under investigation for related crimes.

Other authorities have also commenced proceedings arising from the same investigation. As Skanska announced in April 2016, the Brazilian Federal General Attorney’s Office (AGU) brought a civil suit against seven companies, including Skanska Brasil, as well as against seven individuals unrelated to Skanska. These proceedings focused on alleged improper payments by one of Skanska Brasil’s joint venture partners. The court in the first instance decided to dismiss the case against the company, on the grounds that AGU had not made any allegations of misconduct by Skanska Brasil. That decision was appealed by AGU, but the Appeal Court upheld the lower court’s ruling. AGU has appealed to the Superior Court of Brazil and a ruling is expected within the next two years.

In September 2019, Skanska Brasil was notified that the Federal Audit Court of Brazil (TCU) had completed an investigation regarding a cartel for tenders for projects at the Petrobras Comperj refinery in the state of Rio de Janeiro and involving several companies. Skanska Brasil had, as part of a joint venture with two other companies, constructed the UDAV unit at Comperj. TCU allegations are already under investigation by CADE and are subject to an Improbity lawsuit.

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