* Shares drop as CVM sees flaws in disclosure standards
* Analysts say deal with OSX could hamper OGX finances
* OGX says has enough cash to meet mid-term obligations
(Adds detail about additional inquiries into EBX Group
companies and the nature of its inquiry)
By Caroline Stauffer and Natalia Gómez
SAO PAULO, July 3 Shares of Brazil's OGX
Petroleo e Gas SA slid for a fifth straight day on
Wednesday after securities regulator CVM began a probe into the
embattled company's market disclosure standards.
Shares of the Rio de Janeiro-based company plunged as much
as 18 percent, touching a fresh record low of 0.38 real, even
after the company said it would be able to cover medium-term
obligations with proceeds from the recent sale of a 40 percent
stake in two oil blocks.
The stock is down 91 percent this year.
CVM asked OGX to explain why it pledged to pay $449 million
in cash as compensation to shipbuilder OSX Brasil SA
to stop building several oil platforms meant for a number of
canceled prospects, according to a securities filing. OSX is
controlled by billionaire Eike Batista, who also owns most of
Some analysts have said the deal between OGX and OSX could
jeopardize the survival of the former, which is running out of
cash to repay debt, finance capital spending and honor other
Late Wednesday, CVM said in a statement it was also looking
into other companies in Brazilian billionaire Batista's EBX
Group without naming them.
It added that none of its inquiries into OGX or other EBX
companies had progressed to the level of a formal disciplinary
proceeding or accusation. It defined its actions as "a hunt for
Speaking at an event in São Paulo, CVM President Leonardo
Pereira said the agency is investigating OGX for potential flaws
in the way the company discloses financial and operational
information to minority shareholders.
"When investors are left unprotected, it is a serious flaw,"
Pereira said when asked about the case on Wednesday.
CVM's Pereira said the role of the regulator is to make sure
companies disclose truthful information, and that would be no
different with OGX.
(Reporting by Caroline Stauffer and Natalia Gomez; Additional
reporting by Jeb Blount; Editing by Gerald E. McCormick,
Guillermo Parra-Bernal and Ryan Woo)