Qualicorp Slumps on Report Unit CEO Targeted in Corruption Probe

  • Newspaper said police carried searches at executive's house
  • Company is not being investigated, according to statement

Brazilian health-plan provider Qualicorp SA fell to the lowest level in four years after a report that federal police carried out searches at the residence of a unit’s chief executive officer amid a corruption probe.

The shares slumped 6.5 percent to 14.03 reais at 1:21 p.m. in Sao Paulo, its lowest level since October 2011 on a closing basis. The benchmark Ibovespa index dropped 0.5 percent.

The police collected bank statements, a computer and a mobile phone at the house of Elon Gomes, the CEO of Qualicorp’s Alianca Administradora de Beneficios de Saude, newspaper O Estado de S. Paulo reported, citing the executive’s lawyer. The operation is investigating illegal financing of the election campaign for governor at the state of Minas Gerais.

The police’s press office declined to comment. Qualicorp said in an e-mailed statement that nor Alianca neither its holding company are among the targets of the investigation and that they have never received any kind of financing from the government.

"Probes like this always make the market uncomfortable," Rafael Ohmachi, an analyst at brokerage Guide Investimentos, said from Sao Paulo. "Investors are now waiting for more details on the case."

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