Portugal Telecom's Rioforte deal shows bad governance - BNDES

SAO PAULO, July 8 Tue Jul 8, 2014 10:51am EDT

SAO PAULO, July 8 (Reuters) - Brazil's state development bank BNDES said on Tuesday that Portugal Telecom SGPS SA's bond deal with investment company Rioforte is "inconsistent with minimum standards of good corporate governance."

BNDES said in a statement it requested detailed information on the Rioforte deal, adding that it will seek to protect the interests of Grupo Oi SA's shareholders. Oi claimed last week that Portugal Telecom did not disclose an investment in Rioforte, which is held by a key shareholder under investigation in Luxembourg.

Oi and Portugal Telecom are currently in the process of merging their businesses.

BNDES reiterated its support for Oi's current management. (Reporting by Guillermo Parra-Bernal and Brad Haynes; Editing by Jeffrey Benkoe)