Brazilian prosecutor asks for the suspension of the payment of dividends from Petrobras

The prosecutors of the Brazilian Court of Accounts (TCU) asked on Friday to suspend the announced distribution of dividends from Petrobrasaccording to a court document, after the oil company’s finance chief defended the payments.

On Thursday, the company said it would distribute dividends of about 43.68 billion reais ($8.5 billion), more than double the average shareholder profit paid by each of the five largest Western oil producers, according to Reuters calculations.

The controversy over the company’s payment plan comes days after Petrobras to post a higher-than-expected third-quarter profit, boosted by high prices this year.

The prosecutors of the Court of Accounts argue that the dividends could “compromise the financial sustainability of the company in the short, medium and long term, going against its strategic plan,” according to the document.

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The Brazilian TCU is a court in charge of oversee spending State resources and avoiding the misuse of public funds. Petrobras’ payment would only be suspended if the audit court rules so.

In a call with reporters, the financial director of PetrobrasRodrigo Araujo said he has not reviewed the court document, but stressed that the company acted in line with its shareholder remuneration policy. He added that he is available to provide additional information to the court if requested.

Earlier on Friday, Araujo said Petrobras’ board could change the dividend policy at any time, but said there is no plan to do so.