Update on alleged ethical breaches in Skanska Brasil

Skanska takes the suspicions very seriously and continues to closely monitor and investigate relevant developments in Brazil. We are responding to the authorities but cannot comment on ongoing investigations and proceedings. There is considerable uncertainty as to how all of these proceedings will develop and when they will conclude.

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, the two entities initiated administrative proceedings against Skanska Brasil and twenty other companies. In June 2016, the CGU (now known as the Ministry of Transparency, Inspection and Control) excluded Skanska from public procurement for a period of no less than 2 years in Brazil. This decision has been appealed. The CADE proceeding remains in its early stages and is expected to carry on for a number of years.

Other authorities have also commenced proceedings arising from the same investigation. As Skanska announced in April 2016, the Brazilian Federal Government brought a civil suit against seven companies, including Skanska Brasil, as well as against seven individuals unrelated to Skanska. That proceeding focused on allegedly improper payments by one of Skanska Brasil's joint venture partners. The Judge has decided to reject the claim against Skanska Brasil. That decision has been appealed by the AGU (Federal General Attorney's Office).

An investigation by Brazilian the police regarding four former employees of Skanska Brasil has lead to that one of them now is suspected of cartel and procurement related crimes. The prosecutor is to consider if a formal indictment will be made.

In April, 2017, the Federal Audit Court (TCU) decided that eight companies, among them Skanska Brasil, would be subject to a special audit in respect of projects at Petrobras' Comperj refinery in Rio state. In order to secure any damages resulting from the audit, TCU has ordered the blocking of the companies' bank accounts.