Former Brazilian billionaire Eike Batista has denied having used inside information when selling stock of his oil company last year after an investigation was launched by the country’s financial regulator.
The 57-year-old, once ranked the seventh richest man in the world, sold shares in his former OGX Petroleo & Gas Participacoes unit because they were pledged as collateral for maturing loans of his holding company EBX, the company said.
He will explain the case and present his defense as the Brazilian market regulator, or CVM, still needs to reach a verdict, it said.
“At no point was there bad faith or use of privileged information by the controller of OGX,” EBX said in a statement.
“The share sale questioned by the technical area of CVM took place because those shares were compromised in maturing debt to creditors of EBX. The proceeds from the sale were used to pay back these debts.”
CVM is investigating whether Batista, as controlling shareholder and chairman of OGX, failed to comply with insider trading rules and for alleged price manipulation.
The entity is also probing eight additional procedures against companies that were part of Batista’s conglomerate, CVM said.
Batista sold 70.5 million shares of OGX between May 24 and May 29 last year – three weeks before announcing the cancellation of offshore projects and the possible closure of its only producing wells.
The oil producer filed for bankruptcy protection in October as most of its oil deposits once valued by Batista at $1 trillion turned out to be duds.
“These types of actions, if proved, get serious penalties including the suspension from managerial positions or from operating on the market,” said corporate lawyer Leonardo Theon de Moraes.
“The key here is to know if he alerted the company about his intention to sell the shares before or after knowing that the oil fields were inoperative.”
Batista, once Brazil’s richest person, has been divesting stakes in his oil, logistics, utility and shipping ventures since May as missed targets, mounting debt and accumulating losses forced him to cancel projects and sell business assets.
The entrepreneur also sold some of his luxury assets including an Embraer Legacy 600 private jet.
“Eike Batista was the biggest individual shareholder of OGX, with the biggest capital invested in the company, and the shareholder that lost the most when its business plan failed,” lawyer Darwin Correa, who is representing Batista in the case, said in the statement.
“The accusation doesn’t resist a careful analysis of the facts and that will be proved during the process.”
Meanwhile OGX, which now trades as Óleo and Gás Participações, saw its oil production rise to 464,538 barrels a day last month.
The struggling firm said 324,472bod came from the Tubarão Martelo oil field, with the rest from the Tubarão Azul field which is still being tested.
Recommended for you
