Brazilian businessman Eike Batista, once the richest man in Brazil, gestures on the first day of his suspected insider trading trial in Rio de Janeiro on November 18, 2014.
Less than 10 years ago, Brazil’s Eike Batista was among the richest people in the world, with a US $ 30 billion empire that traced its roots to Canada’s gold mining areas.
This week, the entrepreneurs fall from grace, as Brazilian prosecutors accused the flamboyant 64-year-old of manipulative transactions at two former TSX-listed companies, Ventana Gold Corp. and Galway Resources Ltd.
The charges were brought after billionaire fortunes largely melted away and Brazilian courts found Mr Batista guilty of bribery and market manipulation as part of a larger investigation, known as the Car wash or the car wash scandal, which rocked Brazil’s political and business elite.
Mr. Batista was a self-proclaimed champion of Brazilian business ten years ago, with an empire that included mining, oil and gas, and logistics companies. Its holdings included holdings in Ventana and Galway, junior mining companies with properties in Colombia.
According to Brazilian public prosecutors, Mr. Batista, with the help of eight other people, made 129 fraudulent transactions on the TSX in shares of Ventanas between February 2010 and January 2011, with a total value of 68.4 million. of US dollars. Sao Paulo-based prosecutors allege the group also engaged in fraudulent transactions on the Irish and Brazilian stock exchanges. Prosecutors allege that Mr. Batista personally profited from the transactions and hid the buying and selling from regulators by channeling the transactions through a third-party company called Adviser Investments.
The financial assets (stocks and bonds) were traded through shadow accounts at the shadow bank, The Adviser Investments, which appeared to be the holder, when in fact he was only an intermediary through which Eike Batista was operating, Brazilian prosecutors said in a statement. regulatory filing. None of those allegations were heard in court and Mr. Batista could not be reached for comment on Thursday.
The Ontario Securities Commission declined to comment on the investigation, while TMX Group Ltd., the parent company of TSX, addressed questions to the Investment Industry Regulatory Organization of Canada, which oversees stock exchange transactions. IIROC did not respond immediately.
The prosecution also said that while investigating the alleged business fraud, they noticed that Mr. Batista was still linked to a larger business transaction involving the company in question.
The Ventana Gold trade took place around the time a company owned by Mr. Batista was trying to acquire the Vancouver-based company, according to Brazilian prosecutors. Mr. Batistas EBX Group finally bought Ventana Gold in March 2011, after a hostile 18-month takeover battle. At the time, Ventana was valued at $ 1.5 billion and its main asset was the La Bodega project, a gold-silver-copper mine in Colombia.
Brazilian prosecutors also allege that Mr. Batista and an accomplice manipulated trade in Galway, Toronto. The allegedly fraudulent transactions involved 12.14 million Galway shares, valued at US $ 17.3 million. They took place between February 2011 and February 2012, amid Mr. Batistas’ offer to buy Galway and consolidate its gold mining holdings in Colombia through the EBX group. One of Mr. Batistas’ first business ventures was TVX Gold Corp., which he co-founded in 1983, listed on the TSX and eventually sold to Kinross Gold Inc.
This is far from being the first confrontation of Mr. Batistas with justice. Son of the former Brazilian Minister of Mines and CEO of mining conglomerate Vale, Mr Batista was sentenced to 30 years in prison for corruption and money laundering after being convicted of paying a bribe of $ 16.5 million to former Rio De Janeiro governor Sergio Cabral.
While serving this bribery sentence, in the form of house arrest, he was separately convicted of market manipulation and sentenced to an additional eight years in prison in September 2019. He concluded a plea bargain in March 2020, under which he agreed to serve four years in prison and pay a fine of US $ 160 million in return for working with prosecutors.