The Securities Commission of Brazil has fined the former president of Oi over statements he made to the media in Brazil in March 2014.
The regulator fined Zeinal Bava 200,000 reais (about €58,000) for statements made while a public offering of the telecoms operator was in progress.
According to the decision published on the website of the Brazilian Securities and Exchange Commission this week, “the board decided unanimously to impose a fine of 200,000 reais" in a case that found "Zeinal Abedin Mohamed Bava, at that time president of Oi, guilty for making comments to the media during the course of the public offer of common and preferred shares in the Brazilian operator."
At issue are the statements made on March 26, 2014 when, at an event with journalists, Bava made "references to the benefits that would be received by Oi as a result of the merger with Portugal Telecom," reads the indictment.
"The main points of the transaction were to be discussed by the shareholders at an extraordinary general meeting to be held the following day," the prosecution continued.
"There is no doubt that the statements made by the accused (who occupied a prominent position in Oi) at an event promoted by the company itself, in the course of the public offering and on the eve of a relevant deliberation, had the potential to influence the offer, in clear contravention to the required period of silence."
Zeinal Bava’s speech to the journalists, "carried a very optimistic tone about Oi's future, alluding exclusively to the benefits that would be obtained by the company should Oi's merger with Portugal Telecom be successful. The references to "possible synergies, reduction of leverage and creation of value for shareholders were likely to influence potential investors," in violation of Brazilian law.
This fine is the least of this millionaire's problems.
Zeinal Bava was in trouble in Portugal in May 2016, when the BES supremo Ricardo Salgado revealed during questioning in the Monte Branco money laundering case, that in July 2014 a payment was made to Bava at Portugal Telecom. This was explained by Salgado as money "for a share support operation which never took place" and Bava was said to have returned the money.
Later, Salgado said another payment to Bava had been an ‘award for management’ despite Bava’s total denial that he ever had received any sort bonus or award.
As Portugal Telecom collapsed in Bava was moved sideways to Oi in Brazil from where he was paid off on the most generous of terms, receiving 36 monthly instalments of €150,000 on top of the estimated €50 million he was paid while leading PT.
Bava had ended up overseeing the catastrophic collapse in PT shareholder value, down 68% in 2015 alone due to the non-repayment of a highly suspicious loan to Grupo Espírito Santo of around €700 million.
Bava finds himself the 22nd official suspect in Operation Marquês and suffered the indignity of a house search in July 2016 as investigators looked for, "possible links in the financial routes investigated in Operation Marquês between and Portugal Telecom and Banco Espírito Santo.”
Compared to the shit-storm currently facing this high-flyer, this fine from the Brazilian regulator is the least of his worries.
