A Brazil state prosecutor has filed a lawsuit against a subsidiary of Brookfield Asset Management, a major global property investing firm, accusing the unit of bribing authorities in order to obtain permits to expand a mall in Sao Paolo.
Apparently, the company had paid a good $656,000 to city authorities who in turn approved plans for extension of the mall, Shopping Patio Paulista. The prosecutor, Marcelo Camargo Milani, stated that a number of documents had revealed that extension plans of the mall had been held up for almost around 3 years. However, within four days of the bribe, plans had been approved, reports Reuters.
However, Brookfield Asset Management has completely denied the charges and has stated that the allegations have come from a former employee who was fired from the company in 2010 and was later sued by the firm for embezzlement, reports Financial post.
The company also stated that all the allegations were unproven and they are taking the accusation 'very seriously', reports Wall street Journal.
"These are unproven allegations made by a former employee. We don't believe Brookfield did anything wrong and we are cooperating with authorities." A spokesperson told WSJ.
Brookfield is also conducting an internal inquiry of its own. The company claimed that it had not found any evidence of unlawful activity among its employees, reports Financial post.
The prosecutor is seeking a fine of around $15 million for moral damage. He has also asked for a ban on the company which will restrict the firm from acquiring any kind of additional public construction contracts, reports WSJ.
The Brookfield asset Management company was earlier known as the Brazilian-Canadian Traction and Brascan and was established in 1899. It has played a major role in introducing hydro-electricity in the country. It introduced electricity in Rio De Janeiro and built Telecom infrastructure for the country as well.
The company also owns around eight shopping malls in Brazil and manages around $15 billion worth of investments. It also employs more than 8000 people in its additional business ventures.
The Shopping Patio Paulista case is not the only corruption case doing rounds in the Brazilian Media. Other prosecutors are investigating bribery charges surrounding four other malls owned by the company. However, charges have not yet been filed, Milani told WSJ.
The series of allegations could damage the reputation of the company, harm fund raising and affect business of the firm.
