BRASILIA: Brazil's federal audit court on Wednesday ordered a freeze of former President Dilma Rousseff's assets as well as those of José Sérgio Gabrielli, ex-head of state-run oil company Petrobras, over a US$580 million (438.34 million pounds) loss in the 2006 purchase of a Texas refinery.
The order also covered former Finance Minister Antonio Palocci and three members of the board of directors of Petroleo Brasileiro SA, as Petrobras is formally known, who approved the controversial purchase.
The court, known as the TCU, said it detected "irregularities" in the purchase of the refinery in Pasadena, Texas, a move that it considered made no business sense.
Rousseff said in a statement that there was no evidence any crime was committed by Petrobras board members who approved the deal.
Petrobras paid US$360 million for half of Pasadena Refining in 2006, more than eight times what its previous owner, Astra Oil, a unit of Belgian-controlled Astra Transcor Energy, paid for the 112,000-barrel-a-day refinery a year earlier.
By 2012, Petrobras had sunk US$1.18 billion into it including the cost of buying out Astra’s remaining half after a legal dispute between both firms.
Rousseff, who was impeached last year for breaking budget rules, was chief of staff for President Luiz Inacio Lula da Silva at the time of the refinery purchase and chaired the Petrobras board of directors. She succeeded Lula in 2011.
Federal prosecutors investigating overpriced Petrobras contracts in the country's largest ever corruption scandal centred on the oil company said in 2015 that they uncovered evidence that US$15 million in bribes were paid as part of the initial purchase of 50 percent of the refinery. Prosecutor Carlos dos Santos Lima said Petrobras overpaid for the facility and alleged it was in terrible condition when acquired.
Rousseff said the purchase was decided based on incorrect financial and legal information provided by a director who has since been convicted of corruption. She added that the TCU has in previous rulings exempted board members of responsibility for the losses incurred.
The TCU said the freeze would last one year and cover assets that could guarantee the return to public coffers of the losses run up by Petrobras in buying the refinery.
It was not clear how the US$580 million could be recovered. Rousseff's only known asset is a modest apartment in a middle-class neighbourhood of the southern city of Porto Alegre.
(Reporting by Lisandra Paraguassu; Writing by Anthony Boadle; Editing by Cynthia Osterman and Leslie Adler)