SAO PAULO, July 2 Two Brazilian board members of
Portugal Telecom resigned after learning of 897 million
euros ($1.22 billion) of short-term investments the company made
without consulting them, newspaper Valor Economico reported on
The Portuguese company invested in debt issued by Rioforte,
a firm controlled by the owners of Espirito Santo Group, which
is a major shareholder in Portugal Telecom.
One of the directors, Otavio Azevedo, chief executive of
Brazilian industrial conglomerate Andrade Gutierrez, told the
newspaper he felt "uncomfortable" learning of the investment in
a press release, but he already had plans to step down from the
board due to possible conflicts of interest.
Andrade Gutierrez is a key shareholder in Brazil's Oi SA
, which is merging with Portugal Telecom.
Azevedo and Fernando Magalhães Portella, the head of
Jereissati Participaçõoes, who also quit Portugal Telecom's
board according to Valor, could not be reached for comment.
Shares of Oi and Portugal Telecom, which cemented their
merger with a $3.7 billion share offering in April, have tumbled
this week as analysts warned of potential credit risk from the
Regulators on Tuesday banned short-selling in shares of
Banco Espirito Santo as the Portuguese bank attempted
to allay concerns over problems with its parent company and
possible losses in Angola.
($1 = 0.7345 euros)
(Writing by Brad Haynes; Editing by Leslie Adler)