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Peru's Grana y Montero sacks top executives amid graft scandal
February 28, 2017 / 3:45 PM / 9 months ago

Peru's Grana y Montero sacks top executives amid graft scandal

LIMA, Feb 28 (Reuters) - Peru’s biggest construction group, Grana y Montero , said on Tuesday that its three top executives are stepping down amid a growing graft scandal that had sunk its shares by more than 50 percent in two days.

Grana’s shares climbed back up more than 10 percent on the announcement of the resignations, which came ahead of a shareholders meeting later on Tuesday to tackle the fallout of a far-reaching corruption inquiry into the company’s partner, Brazilian builder Odebrecht.

The resignations of Jose Grana, the company chairman and son of one of its founders; Chief Executive Mario Alvarado; and director Hernando Grana will be effective on Thursday, the company said in a statement. Deputy chief executive Luis Diaz will become the new chief executive.

The company said it would continue to work to prove wrong allegations that it knew about $20 million in bribes that Odebrecht has admitted to giving to former Peruvian president Alejandro Toledo.

Toledo has denied wrongdoing.

The former head of Odebrecht in Peru was quoted in a local magazine on Friday telling prosecutors that Grana the company and its other local partners on two highway contracts were aware of a deal to bribe Toledo and knew they would have to “assume their part.”

Grana’s outgoing executives have not been accused of anything.

Odebrecht has been at the center of Latin America’s biggest region-wide corruption scandal since acknowledging in late December that it distributed hundreds of millions of dollars in bribes from Peru to Panama. (Reporting By Mitra Taj and Ursula Scollo; Editing by Bill Trott)

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