A federal prosecutor in Brazil on Thursday opened a criminal investigation into McDonald’s and its Latin American master franchise owner, Arcos Dorados Holdings, saying that they and related entities may have engaged in “fiscal and economic crimes.”
The prosecutor, Marcos José Gomes Corrêa, is looking into whether McDonald’s and Arcos, which subfranchises McDonald’s restaurants in Latin America, have failed to comply with tax and other laws in Brazil, in addition to possible violations of the country’s franchise law.
The possible tax law violations include accusations made by Brazilian labor unions that Arcos paid bribes to government officials in return for favors from Brazil’s tax collection regulator.
Paula Sambo – Bloomberg Business, 12/16/2015
President Dilma Rousseff’s supporters on the congressional budget committee will introduce an amendment to the 2016 budget bill that would allow the administration to aim for a surplus before interest payments of 0.5 percent of gross domestic product, said Paulo Pimenta, the government’s leader on the committee. Rousseff previously wanted to target a so-called primary surplus of 0.7 percent.
The move, which was said to be opposed by Finance Minister Joaquim Levy, is seen by analysts as a potential trigger to further credit-rating downgrades and possibly even the exit of Levy from Rousseff’s administration. The currency lost 2 percent to 3.9521 per dollar at 9:38 a.m. in Sao Paulo, the largest decline among 31 major currencies tracked by Bloomberg.
Vinod Sreeharsha – McClatchyDC, 04/01/2015
Brazilian President Dilma Rousseff is expected to meet President Barack Obama next week when the Western Hemisphere’s leaders gather for the Summit of the Americas in Panama, in what will be Rousseff’s highest-profile encounter with Obama since revelations last year that the National Security Agency had spied on her.
Made public in the documents leaked by fugitive former NSA contractor Edward Snowden, the spying revelation led to the cancellation of a planned Rousseff visit to Washington, and she’s expected to respond next week to an invitation from the White House to reschedule the trip.
Yet tense relations with the Obama administration are nothing compared with what Rousseff faces at home: two years of virtually no economic growth, a currency that’s plunged 18 percent against the dollar just since Jan. 2, a major corruption scandal and loud calls for her resignation or impeachment. In just the third month of her second four-year term, her approval rating is 13 percent, according to the Brazilian pollster Datafolha, after she won 52 percent of the vote last fall.
Guillermo Parra-Bernal – Reuters, 02/04/2015
Any revival in initial public offerings in Brazil seems to hinge on whether new Finance Minister Joaquim Levy can clean up public finances and get the country’s economy back on track.
Strengthening the market for new listings depends increasingly on how much leeway President Dilma Rousseff will give the University of Chicago-trained economist to cut Brazil’s record budget gap and reverse the interventionist policies that marred her first term.
Stung by dozens of deals that failed to deliver the promised returns in recent years, money managers have become cautious about Brazilian offerings. In 2014, only one company went public on the São Paulo Stock Exchange, the worst performance for domestic IPOs in 11 years.
Joe Leahy – Financial Times, 1/30/2015
Nerys Pearce’s life changed forever when an illegally parked car backed out in front of her motorbike in London in 2008. The accident left the aspiring physiotherapist and triathlete, who planned to serve full-time in the British Army, paralysed from the chest down and unable to work.
After a five-year court battle, the Ascot, Berkshire, resident received a net settlement of nearly £1.2m. But her bad luck was far from over — she invested a large chunk of the money in EcoHouse Developments, a company controlled by former high-flying entrepreneur, Anthony Armstrong Emery.
A UK-based company that attracted investors from Britain, Singapore and other countries to its housing projects for the poor in Brazil, EcoHouse collapsed suddenly late last year and is now being probed by police in the UK and Brazil.
Luciana Magalhaes, Rogerio Jelmayer, and John Lyons – The Wall Street Journal, 11/25/2014
Brazilian President Dilma Rousseff is set to name Joaquim Levy, a former treasury secretary and prominent banker, as the country’s next finance minister, a move aimed at bolstering Brazil’s credibility amid slowing growth, rising inflation and falling markets, an official said.
Ms. Rousseff will name Mr. Levy as Thursday, possibly with other appointments for her second term that starts in January, the official said. Mr. Levy couldn’t be reached for comment.
The 53-year-old economist will succeed Finance Minister Guido Mantega to assume the top economic post at a crucial time for a resource-rich country hitting a downturn amid declining commodity prices. Brazil is mired in a toxic mix of near-zero growth and rising inflation, and its currency has lost more than a third of its value during Ms. Rousseff’s first term.
Brian Winter – Reuters, 11/25/2014
When Brazilian President Dilma Rousseff first considered replacing Finance Minister Guido Mantega two years ago, a top aide confided that any good candidate for the job would have to meet two requirements.
First, a good personal relationship with Rousseff, a notoriously gruff and demanding manager known for making subordinates break down in tears. And second, accept that “Dilma likes to be the minister” – that as a trained economist with a fervent belief in a strong state, she would insist on making many policy decisions, even minor ones, herself.
Rousseff is expected to finally replace Mantega this week with respected banker Joaquim Levy. But it’s unclear whether the job description has really changed since then and whether Levy will have the power and independence to execute the pro-business shift that investors are hoping for.