Vanguarda Drops Third Day on Concern Banuelos to Sell More

Vanguarda Agro SA slid for a third day on concern a dispute between its main shareholders will spur billionaire Enrique Banuelos to continue unloading his stake in the Brazilian farm company.

The stock fell 3.1 percent to 31 centavos at the close in Sao Paulo and is down 69 percent this year, the second-worst performance on the 68-member Bovespa (IBOV) index, which has fallen 18 percent in the period.

Disagreement over a debt-reduction plan proposed by Banuelos’s Veremonte Participacoes SA led four of his executives to resign from Vanguarda’s management and board last month. Investor confidence in the company eroded further amid allegations that other controlling holders engaged in insider trading. Funds controlled by Banuelos cut their stake in Vanguarda to 15.9 percent last week from 21.3 percent in October, according to filings from Vanguarda Dec. 16 and yesterday.

“It looks as if he’s going to sell, if not the whole lot, a larger stake than was already announced,” said Felipe Miranda, who helps oversee 150 million reais ($80.7 million) as an analyst at Gradius Gestao in Sao Paulo. “It’s a very big internal dispute. There are accusations of insider trading.”

Veremonte Chief Executive Officer Marcelo Paracchini, who resigned as Vanguarda’s chairman last month, declined to comment in a telephone interview yesterday on whether the firm plans to sell any more stock.

Complaint to Regulators

Juliano Leite Malara, a Vanguarda investor and member of the audit board, filed a complaint with the securities regulator after receiving a letter signed by Chief Executive Officer Bento Moreira Franco and internal counsel Cristiano Soares saying three controlling shareholders had traded stock during prohibited periods before the release of relevant information.

Franco and Soares, in the letter obtained by Bloomberg News, said that the shareholders traded during the blackout period ahead of the release of third-quarter results on Nov. 14, as well as before the Dec. 8 announcement of the 100 million- real sale of two biofuel plants to Oleoplan SA.

Vanguarda said in an e-mailed statement from its external press agency yesterday that it doesn’t comment on its shareholders. Brazil’s securities regulator, known as CVM, has received Malara’s complaint, according to its website.

Banuelos holds his stake in Vanguarda through the Vila Rica I Fundo de Investimento em Participacoes and Tiradentes Fundo de Investimento em Participacoes funds.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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