Brazil’s Eike Batista Fined 1.4 Million Reais by Market Regulator

Luciana Magalhaes – The Wall Street Journal, 3/18/2015

Former billionaire Eike Batista was fined 1.4 million Brazilian reais ($429,000) Wednesday by Brazil’s market regulator for failing to provide shareholders with timely information while his industrial empire was collapsing in 2013.

Mr. Batista plans to appeal the fines, one of his attorneys said.

Once Brazil’s richest person, Mr. Batista over the last two years has sold assets and dismantled his group of companies to pay debt. He also is on trial on market-manipulation and insider-trading charges related to his oil company, charges he has denied.

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Brazil’s scandalous boom to bust story

Patrick Gillespie – CNN Money, 2/19/2015

Five years ago its economy grew three times faster than the United States. In 2011 its economic size surpassed Great Britain’s. Millions of Brazilians moved from poverty to the middle class, and the president at the time, Luiz Inácio Lula da Silva, had an 83% approval rating.

Eike Batista, once Brazil’s richest person, told “60 Minutes” that his nation was realizing its potential.

“Brazil has put its act together,” Batista told 60 minutes in 2010. “We’re walking into a phase of almost full employment…It’s unbelievable.” It certainly was unbelievable.

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Eike Batista: From billionaire to negative billionaire?

Sarah Whitten – CNBC, 2/9/2015

Once known as Brazil’s richest man, Eike Batista has had the biggest drop in net worth of any other billionaire to date. It is estimated that his wealth peaked at $30 billion in 2012, but Batista claims he is now worth a negative $1 billion.

Make that negative $1.2 billion.

Federal Police in Rio de Janeiro seized six vehicles, computers, mobile phones, watches and roughly $32,500 in cash from the business magnate and former race car driver.

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Brazil Authorities Seize Cars, Documents From Eike Batista

Luciana Magalhaes – The Wall Street Journal, 2/6/2015

Brazilian authorities continued to tighten the screws on former Brazilian tycoon Eike Batista on Friday, seizing assets and documents in early-morning raids on two of his homes.

Brazil’s Federal Police took possession of cars, documents, jewelry, mobile telephones, computers and other valuables, according to the judge presiding over the former billionaire´s trial for market manipulation and insider trading.

Rio de Janeiro-based Judge Flávio Roberto de Souza told The Wall Street Journal Friday morning that he is looking for evidence the businessman has sent money abroad.

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What A Surreal Day For Brazil

Linette Lopez – Business Insider, 1/28/2015

In the past year or so Brazil’s economy has gone from one of magnificent growth to one of incredible disappointment, and two stories out today especially embody the epic scale of the country’s fall from grace.

One story is about a man, the other is about a company.

The man is Eike Batista — once the 7th richest man in the world aggressively angling for the top spot, he seemed to have everything. He was the man who went into the jungles of the Amazon and came out with a fortune built on his holding company, EBX. He raced speed boats, owned Brazilian jets, married a model, and made friends with world leaders.

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Brazil Aims to Put Eike Batista Behind Bars

Denyse Godoy – Bloomberg, 11/13/2014

Less than three years after President Dilma Rousseff dubbed Eike Batista “the pride of Brazil,” prosecutors are trying to send the former billionaire to prison for alleged insider trading in a trial set for later this month. If they succeed, Batista will be the first person in the nation to serve time for that crime in the 13 years since such activity was outlawed.

“Insider trading is clearly widespread in Brazil,” says David Riedel, president of Riedel Equity Research in Greenbrae, Calif. “There is a consistent pattern of leaking. But the problem is not the laws—it’s that they aren’t enforced.” Of the 11 biggest mergers and acquisitions in Brazil in the past two years, at least seven of them were reported by newspapers and news agencies before the official announcement was made, according to data compiled by Bloomberg News. The stock of real estate developer Brookfield Incorporações skyrocketed 21 percent on Jan. 23 on rumors its parent company would take the unit private. That deal was announced four days later.

Other kinds of information have leaked as well. The benchmark Ibovespa stock index surged on Sept. 16 as speculation spread that an upcoming poll would show market-friendly presidential candidate Aécio Neves gaining voter support. The poll, released two hours after the market closed, confirmed just that. (Neves lost a runoff election to Rousseff on Oct. 26.)

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Brazil’s BNDES: Batista’s exit from six semicondutores won’t cause major delay

Luciana Magalhaes – Wall Street Journal, 1/13/2014

Construction of Brazil’s first semiconductor plant shouldn’t be significantly delayed by the exit of investor Eike Batista, the head of Brazil’s national development bank, or BNDES, said Monday.

Mr. Batista’s sale of his stake in SIX Semicondutores, a joint venture started in 2012 with International Business Machines Corp. and BNDES, follows the meltdown of his industrial group owing to financing difficulties. SIX is in talks with Argentina’s Corporacion America to buy at least part of Mr. Batista’s 33% stake.

“If there is a delay, it will be of two or three months, but we can make up that lost time,” said BNDES President Luciano Coutinho in an interview.

The plant is expected to start output in 2015, and will produce application-specific integrated circuits, or ASICs, which are chips designed for a specific use and are common in sectors such as the pharmaceutical industry. They are different from more general-purpose chips produced by companies such as Intel Corp. for tablets and other hand-held devices, Mr. Coutinho said.

Ibovespa declines on concern Brazil’s economy remains stalled

Julia Leite – Bloomberg, 11/22/2013

The Ibovespa fell for a third straight day, with Banco do Brasil SA leading banks lower, on concern Brazil’s economy remains stalled and amid speculation government deficits will lead to a reduced credit rating.

The MSCI Brazil/Financials Index declined the most among 10 industry groups while retailer Cia. Hering was the biggest loser among consumer stocks. OSX Brasil SA, the shipbuilder of former billionaire Eike Batista, rose after it notified its bond trustee that it will miss next month’s interest payment on $500 million of vessel-backed bonds.

The Ibovespa slipped 0.6 percent to 52,347.62 at 10:26 a.m. in Sao Paulo, extending its weekly drop to 2.1 percent. Fifty-four of its 72 member stocks retreated today as the median forecast of analysts surveyed by Bloomberg called for gross domestic product to expand 2.5 percent this year and next. The economy increased 0.9 percent last year, the worst performance since the 2009 financial crisis.

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Brazil’s OGX considers legal steps after Petronas rescinds $850 million deal

Reuters, 11/18/2013

OGX Petróleo e Gás Participações SA (OGXP3.SA), the Brazilian oil producer that filed for bankruptcy protection, is reviewing legal options after Malaysia’s Petroliam Nasional Bhd PETR.UL canceled its agreed purchase of a stake in two OGX oil blocks.

OGX, controlled by Brazilian former billionaire Eike Batista, said in a securities filing late on Monday that it received notice from Petronas, as Malaysia’s state oil company is known, that the latter had unilaterally rescinded the $850 million contract.

In its filing, OGX said that it is “analyzing the adoption of any potential legal measures” related to Petronas’ move.

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Brazil: stock market tries to lure back investors

Samantha Pearson – Financial Times, 11/17/2013

It was the day Brazilian portfolio managers had been waiting for. After filing for bankruptcy protection, Eike Batista’s oil company OGX was finally removed from Brazil’s benchmark Bovespa stock index last month.

Given the Bovespa’s methodology of weighting stocks by their liquidity rather than market value – a formula that will be changed next year – OGX’s collapse has ravaged Brazil’s stock market in spite of the relatively small size of the company.

“It led to an abnormal situation whereby a stock that should not represent a large proportion of the index in the end became a blue chip in Brazil,” says Carlos Constantini, global head of research at Itaú BBA, the Brazilian bank.

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