Batista, 57, sold shares of the oil unit, then known as OGX PetrOleo e Gas Participacoes SA (OGXP3), because they were pledged as collateral for maturing loans of his holding company EBX Group Co., EBX said in an e-mailed statement. 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 the April 11 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 regulator said in a statement April 11. 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, 2013, his first divestment in the company, OGX said on June 10, three weeks before announcing the cancellation of offshore projects and the possible closure of its only producing wells. OGX stock and bonds plummeted to record lows after the July 1 announcement. 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.
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.”
To contact the reporter on this story: Juan Pablo Spinetto in Santiago at firstname.lastname@example.org
To contact the editors responsible for this story: James Attwood at email@example.com Keith Gosman, Jason Rogers