BRASILIA - Brazil's federal audit court on Wednesday ordered a freeze of former President Dilma Rousseff's assets as well as those of Jose Sergio Gabrielli, ex-head of state-run oil company Petrobras, over a $580 million loss in the 2006 purchase of a Texas refinery.
The order also covered former Finance Minister Antonio Palocci and three members of the board of directors of Petroleo Brasileiro SA, as the oil company is formally known, that approved the controversial purchase.
The court, known as the TCU, said it detected 'irregularities' in the purchase of the refinery in Pasadena, Texas, a move that it considered made no business sense.
The TCU said the freeze would last one year and cover assets that could guarantee the return to public coffers of the losses incurred by the oil company in buying the refinery.
Petrobras paid $360 million for half of Pasadena Refining in 2006, more than eight times what its previous owner Astra Oil, a unit of Belgian-controlled Astra Transcor Energy, paid for the 112,000-barrel-a-day refinery a year earlier.
By 2012, Petrobras had sunk $1.18 billion into it including the cost of buying out Astra's remaining half after a legal dispute between both firms.
Rousseff, who was impeached last year for breaking budget rules, was chief of staff for President Luiz Inacio Lula da Silva at the time of the refinery purchase and chaired the Petrobras board of directors.
In 2014, when the operation was being investigated for alleged graft, then-President Rousseff said she had been given incomplete information by directors responsible for the deal.
Federal prosecutors investigating overpriced Petrobras contracts in the country's largest ever corruption scandal centered on the oil company said in 2015 that they uncovered evidence that $15 million in bribes were paid as part of the initial purchase of 50 percent of the refinery.
Prosecutor Carlos dos Santos Lima said Petrobras overpaid for the facility and alleged it was in terrible condition when acquired.
Reporting by Lisandra Paraguassu; writing by Anthony Boadle, editing by G Crosse and Cynthia Osterman.