UPDATE 3-Petrobras ex-director arrested in graft scandal; markets sink
(Updates prices, adds OAS searched, details)
By Stephen Eisenhammer and Gustavo Bonato
RIO DE JANEIRO/SAO PAULO Nov 14 (Reuters) - Brazilian police arrested a former Petróleo Brasileiro SA executive on Friday, sending the state-run oil company's shares and bonds down after a widening corruption scandal forced it to delay the release of its financial results.
Former engineering director Renato Duque was the second senior executive arrested at Petrobras, as the company is commonly known, in an investigation into a money laundering and bribery scheme that allegedly skimmed billions of dollars off contracts and into political parties' coffers.
Police also raided the offices of leading construction and engineering firms, seized potentially incriminating documents and arrested 18 people suspected of involvement in the scheme. Local media reported two chief executives were among them.
The scandal has put pressure on leftist President Dilma Rousseff, who narrowly won re-election last month. Rousseff, who has pledged a thorough investigation, was chairwoman of the Petrobras board between 2003 and 2010.
Recently one of the world's six most valuable companies, Petrobras has experienced one of the most spectacular corporate reversals in emerging market history. Its net worth has slumped 77 percent since 2008.
On Thursday, the company delayed the release of its third-quarter earnings and said it had hired to private law firms to investigate the allegations of money laundering.