May 12, 2016 / 12:07 AM / 2 years ago

UPDATE 1-Brazil's Eletrobras admits to possible New York delisting

SAO PAULO, May 11 (Reuters) - Brazilian state-run power company Eletrobras could see its American Depository Receipts delisted as a result of delayed regulatory filings, the latest consequence of a vast corruption investigation rattling the South American country.

Eletrobras said delivery of its 20-F form, required of foreign issuers listed in the United States, had been delayed by an internal investigation that is analyzing potential financial losses from a graft scheme involving local construction firms.

Eletrobras, known formally as Centrais Eletricas Brasileiras SA, said it was in contact with the U.S. Securities and Exchange Commission and the New York Stock Exchange over the forms for 2014 and 2015 to try to avoid a delisting.

The company had planned to turn in the forms by May 18, after exhausting extensions. Brazil’s official gazette reported last week that Eletrobras executives were in New York meeting with members of the SEC and the New York Stock Exchange.

The internal investigation led by law firms Hogan Lovells and WFaria Advogados is not “sufficiently complete” to allow the company to determine financial impacts, the Eletrobras filing said. It has been delayed by problems investigating massive hydroelectric dams in which Eletrobras has a minority stake.

Brazilian federal prosecutors say construction firms that bribed politicians and executives at state-run oil firm Petroleo Brasileiro SA in return for bloated contracts likely repeated the scheme at Eletrobras.

Brazilian prosecutors charged Othon Luiz Pinheiro da Silva, the former chief executive of Eletrobras subsidiary Eletronuclear, with corruption and money laundering. He is accused of taking 4.5 million Brazilian reais ($1.3 million) in bribes related to the Angra 3 plant near Rio de Janeiro.

The investigation has jailed dozens of engineering executives and fueled the campaign to impeach President Dilma Rousseff. She is expected to be suspended after a Senate vote later on Wednesday for allegedly manipulating public accounts. She denies any wrongdoing.

Challenges facing the internal investigation at Eletrobras stem from limitations in Brazil’s corporate laws as well as limited access to plea bargain testimony from the federal corruption probe, the company said.

The law firms started investigating possible bribery at three Amazonian dam projects worth billions of dollars and a nuclear power plant. They later expanded to nine projects, sources have told Reuters.

$1 = 3.45 Brazilian reais Reporting by Caroline Stauffer; Editing by Leslie Adler

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