L'Assassin Du Dimanche
Beach holidays are no fun in the rain and today the tail-end of Hurricane Arthur hits the Portuguese south coast where we are staying.
So, "why not do my tables?" you may well ask. Well first of all, I am working on a weeny notebook. And secondly, I have an eye infection which makes me one-eyed. So you will have to use the latest tables from two weeks ago until I am better or better plugged in. More for paid subscribers following my updates on Portugal's Espirito Santo family mess, last Thursday, based on the local press commentary. Of course, it is really big news in Portugal.
To begin with the most important factoid, Otavio Marques of Azevedo, who resigned from the Portugal Telecom (PT) board because of questions over its cross-loans in short-term commercial paper to Rioforte, issued by the Espirito Santo international investment company on behalf of the Espirto Santo familyholding company in Luxembourg, is not a member of the family; in fact, he is not even Portuguese. Marques sat on the board of Oi, the Brazilian target for takeover as a representative of the company PT was fusing into. As the deal progressed he moved over to PT's board as a representative of Oi.
He seems to have been designated as the fall-guy since another Brazilian on the PT board came from a more substantial Oi controlling group. In theory, neither Marques nor Andrade Gutierrez, the Oi major shareholder, had anything to do with how PT placed the money it has collected in order to buy them out. In fact, the board has no administrative role in financing PT or investing its cash, which under Portuguese law, as under US or other laws, is up to its executives (at least in theory).
Diario Economico, the local pink paper, writes that the US SEC is already looking into the matter of who decided on finance because PT has filed an F4 document which specified how the interim administration was organized. As we all know, PT has an NYSE listing and is therefore regulated in these matters by our watchdogs.
Now having a Brazilian take the fall is useful, as it stops the locals from using the Rioforte loan to reopen the matter of the merger and its terms. That is why the Marques was designated to resign over "discomfort" about the loans. The matter was never discussed by the board, according to Valor Economico, another Portuguese business publication. The lead seller, Mr.Gutierrez, says he was not consulted about the matter, which was never put before the board.
Assuming that the money is returned to PT and I am pretty sure it will be, the process of taking over Oi will require a bunch of annual meetings and proxy votes in Sept. and Oct. in three countries. The Portuguese government wants the deal to be consummated but it doesn't want to bail out the Espirito Santo family, which would be politically hazardous.
Tomorrow I will write some more gossip about Jared and Ivanka, a young New York power couple often mentioned within news in Israel. They are about to buy out the equivalent of Berkshire Hathaway on the Tel Aviv market, it appears. And once again our portfolio is involved.
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