* Galeazzi oversaw turnaround at Brazil biggest retailer
* Chairman Diniz looking for a replacement to Galeazzi
* Resignation underscores tension between Casino, Diniz
By Cesar Bianconi
SAO PAULO, June 20 Claudio Galeazzi, the
executive who oversaw a turnaround in Grupo Pão de Açucar SA
, Brazil's largest retailer, decided to step down as a
board member as a rift between the company's two biggest
Galeazzi said there was mounting pressure from Casino
Guichard Perrachon & Cie, the French retailer that is
Pao de Acucar's largest shareholder, to disclose the nature of
his business relations with food processor BRF Brasil Foods SA,
according to a letter obtained by Reuters. Brasil Foods
is a supplier to Pão de Açucar's supermarket
Casino has long said that any outside business relations
between Pão de Açúcar executives and Brasil Foods imply a
conflict of interest. Galeazzi, who was brought into the company
by Chairman Abilio Diniz in 2007, is currently a partner at
investment banking firm BTG Pactual Group.
A rift between Casino and Diniz, who is Pao de Acucar's
second biggest shareholder, has gained momentum since Diniz was
appointed chairman of Brasil Foods earlier this year. Casino
fell out with Diniz in 2011, when the Brazilian tycoon sought to
orchestrate a merger between Pão de Açúcar and Carrefour SA
, Casino's arch-rival in France.
"Since I assumed my board seat there have been made a number
of insinuations about my probity, including an attempt to use my
professional relation with BRF to put my professionalism under
question," Galeazzi said in the letter.
"My relation with BRF Brasil Foods never left me in a
conflict of interest," Galeazzi wrote.
Casino said, in a statement, that it had asked Galeazzi
about his dealings with Brasil Foods but he refused to answer.
Many executives loyal or close to Diniz have left Pão de
Açúcar in recent months as a result of the rift.
A source with direct knowledge of the situation told Reuters
that Diniz is looking for a replacement to Galeazzi. The source
declined to name potential candidates for the board seat.
A spokeswoman for Pão de Açucar could not be contacted for
comment. Efforts to reach Galeazzi were unsuccessful.
Shares of Pão de Açucar shed 2.1 percent to 96.49 reais on
Thursday. The stock is up 9.7 percent this year.