Police raid Brazil steelmaker Gerdau, issue CEO arrest warrant

SAO PAULO (Reuters) - Federal police said they raided the offices of Brazilian steelmaker Gerdau SA (GGBR4.SA) on Thursday and issued an arrest warrant for its chief executive on suspicion the company evaded hundreds of millions of dollars in taxes.

Federal police said Gerdau, Brazil's largest steelmaker, is suspected of evading 1.5 billion reais ($380 million) in back taxes.

A police spokesman said they had a warrant for the arrest of André Gerdau Johannpeter, the company's chief executive, for questioning. The executive had agreed to appear voluntarily later on Thursday, the spokesman added.

Search and seizure warrants were being carried out at Gerdau offices in the cities of Sao Paulo, Brasilia, Rio de Janeiro, Recife and the company's headquarters in the southern city of Porto Alegre, police said.

The raids are part of an inquiry, known as "Operation Zealots," into kickbacks by companies through lobbyists to tax officials in return for waiving tax debts and fines.

Gerdau said the company was cooperating with police and had no further information to provide.

The raids on Gerdau, a family company that has made steel for generations, comes as Brazilian prosecutors grow increasingly aggressive in efforts to crack down on corruption by some of the country's most powerful firms.

Andre Gerdau's father, Jorge Gerdau Johannpeter, was CEO of the steelmaker from 1983 to 2006 and has been a close advisor to President Dilma Rousseff on industrial policy.

In addition to Operation Zealots, which is probing suspected kickbacks at dozens of companies, Brazil for the past two years has been gripped by the far-reaching corruption probe around state-run oil company Petroleo Brasileiro SA (PETR4.SA).

Dozens of executives at Brazil's biggest construction firms have been arrested or charged with corruption in that investigation.

On Monday, police again searched offices of Odebrecht, Brazil's largest engineering and construction conglomerate. Marcelo Odebrecht, the company's chief executive, was jailed in July in connection with the Petrobras scandal.

On Tuesday, police arrested Rousseff's main political campaign strategist Joao Santana, on the suspicion that he had been paid off-shore by Odebrecht with funds siphoned from the Petrobras graft scheme.

(Reporting by Reese Ewing and Anthony Boadle; Editing by Paulo Prada and W Simon)