If Mexico can finally imprison Elba Ester Gordillo, why shouldn’t the Brazilian finally bring down the notorious M.A.L.U.F?
The following excerpt is translated from the Estado de S. Paulo | Portal ClippingMP. File it under «political grotesques».
SÃO PAULO – A São Paulo court has ordered the freezing of R$ 520 million from the Maluf family business Eucatex.
Or about US$ 260 million. Eucatex, a eucalyptus grower, was founded by in 1951, thrived under the military dictatorship — which named Maluf mayor of the capital and later governor of São Paulo state. He is featured in a World Bank list of 150 notable corruption cases.
The measure was taken at the behest of the São Paulo state prosecutor’s office, which denounced insider transactions within the Eucatex group as part of a fraudulent effort to transfer Eucatex assets off the books and avoid payment of future court-ordered reimbursements as a result of various law suits against Maluf, accusing him of embezzling public funds while serving as mayor of São Paulo.
[The court] found that the prosecutor’s indictment demonstrates “the possibility of fraudulent reporting of assets” by Eucatex, but the ruling may be overturned if Eucatex can show that the penalty will drive the company into bankruptcy.
As the Folha de S.Paulo revealed in March, the prosecutor’s office believes that the family is trying to escape payment of court-ordered monetary awards by transferring assets to a newly founded member of the group, ECTX. Prosecutors see the transaction as fraudulent and believe its purpose is to “dehydrating” Eucatex of its assets.
Back in March, Eucatext VP José Antônio Goulart de Carvalho, denied the accusation. Goulart said the asset transfer to ECTX was undertaken because the new company would represent the vanguard of a new, more transparent governance model.
In July 2012, Eucatex transferred R$ 320 million of its assets to ECTX. In May and October, Eucatex released a Material Event statement to the market, saying it had initiated a “process of share reorganization” in order to transfer its assets.
ECTX, according to Goulart de Carvalho, is waiting for CVM authorization to launch an IPO in the capital markets.
Eucatex and the Maluf family are defendants in a case in which prosecutors have moved for the return of US$ 153 milhões that was supposedly stolen from the São Paulo city government, wired overseas and then funneled into Eucatex through various financial transactions.
There is also an open case on the Isle of Jersey involving the transfer of money by Maluf family members.
Overseas companies with ties to the Malufs have been ordered to reimburse US$ 28 million to the city of São Paulo, funds thought to be the fruit of fraudulent dealing involving the city government. These companies have appealed the decision.
In the present case, the Jersey court also ordered the freezing of Eucatex shares belonging to foreigners with ties to Maluf.
In a statement, Eucatex says it was not officially notified of the asset freeze involving R$ 520 million as ordered today by the São Paulo court.
There is another open case against Maluf, in fact, O Dia notes:
In the federal Supreme Court, Maluf and family were charged in 2011 on allegations of money laundering and using Eucatex to camouflage the misappropriation of public funds during Maluf’s term as mayor, from 1993 a 1996.
Maluf’s status as a sitting federal legislator entitles him to be tried by the Supreme Court.
In an official statement, the company says the motion to block its accounts has already been applied for by the prosecutor in 2009, and the application failed both in the first instance and on appeal.
According to Eucatex, the accusation is groundless given that the company’s net assets increased after the cretion of ECTX, from R$ 997 million in 2011 to R$ 1.1 billion at year’s end 2012.
“It should be recalled that Eucatex is a publicly traded corporation, with hundreds of shareholders, among them the federal legislator Paulo Maluf, who is not an executive of the company or even a member of the board of directors,” the company added.
True: it is currently led by Maluf’s son Flávio. Interpol has an open arrest order on Flávio, from what I read. Otávio Maluf is chairman of the board.
The creation of ECTX was part of a general restructuring of the company with the goal of qualifying for the Novo Mercado listing segment of the São Paulo Stock Exchange, reserved for companies with superior governance standards and practices. The new company has been waiting since December for the CVM to rule on its registration as a publicly traded company.