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Son of Maluf & The Uruguayan Connection


Source: Folha de S.Paulo

A São Paulo court has ordered the freezing of R$ 47 million in Eucatex shares belonging to Eucatex executive Flávio Maluf and kept on deposit at a bank in Switzerland.

Maluf is the son of the notorious Paulo Maluf. Eucatex is a public company with shares circulating on the Bovespa for many years now. It farms and sells eucalyptus trees.

The order was issued by judge Celina Toyoshima, at the request of state prosecutor  Silvio Marques, who is looking into misappropriation of public funds when Paulo Maluf was mayor of São Paulo, from 1993 to 1996.

The prosecutor suspects that the money misappropriated from pubic works were used to purchase the shares.

One of many iconic Maluf moments was when he ordered substantial improvements to roadways connecting his business and home to City Hall. For his own convenience.

If she can prove her case, the city administration can file suit to have its money back.

Since 2001, Eucatex shares increased in value by 250% — which means the market value of the shares in Switzerland is R$ 164.5 million..

Brazilian authorities only learned of the existence of these shares in offshore havens because Flávio was trying to transfer them from Finter Bank, in Switzerland, to a Uruguayan corporation, Cuznar S/A.

As  Finter is a small bank, it consulted with UBS, in Zurich ,on the transaction. UBS found the deal suspicious because Flávio is a “politically exposed person,” and questioned  Itaú Unibanco, global custodian of Eucatex shares in Brazil.

Itau saw what it believed to be indications of money laundering and communicated its doubts to COAF, the money laundering authority.  Coaf advised the prosecutor, who was successful in having the funds frozen. .

The custodian is  the institution responsible for the storage of shares. In a hypothetical example, shares with shares under custody in São Paulo can be used a gurantee to obtain a loan from a Swiss bank.

Maluf is accused by prosecutors of diverting US$ 344 million from the city coffers duringthe construction of Roberto Marinho Avenue and the Ayrton Senna tunnel.

He denies all charges.

Parte desse valor foi usado para capitalizar a Eucatex em 1997, com a injeção de US$ 92 milhões, numa operação conduzida pelo Deutsche Bank na Europa, ainda segundo o Ministério Público.

A própria família Maluf comprou debêntures da Eucatex, usando como biombo fundos de investimento estrangeiros administrados pelo Deustche Bank, de acordo com o Ministério Público.

A família Maluf controla diretamente 3,6% do capital acionário da Eucatex. Fundos de investimento estrangeiros detêm outros 65,4%.

Em abril deste ano, a Justiça da Ilha de Jersey, uma possessão britânica, condenou empresas cujo controle é atribuído a Maluf a devolver à prefeitura US$ 28,3 milhões, equivalentes a R$ 63 milhões.

Parte do dinheiro repatriado pela prefeitura estava depositado em Jersey na forma de ações da Eucatex.

Maluf nega controlar as empresas condenadas e ter contas no exterior, mas documentos obtidos pelas autoridades de Jersey mostram que ele e seus familiares movimentaram contas na ilha.