Former(?) Brazilian billionaire, Eike Batista’s slide to financial oblivion continues with a Tuesday Brazilian court ruling.
Oh, how the mighty do fall
Once the world’s eighth-richest man with a net worth of over $30 billion, closer to $80 in many’s estimations, Mr. Batista’s fall from grace continues. His fall is even more pronounced given his assurances to friends, investors and reporters alike when he comfortably boasted that he would be worth $100 billion within a few years in 2011.
Batista was once the head of six publicly traded companies though debt structuring saw his empire fall like a house of cards when his petroleum company, OGX, defaulted on over $5 billion in debt in 2013. The fall of OGX saw his other companies immediately feel the impact.
On Tuesday, Brazilian regulator C.V.M ruled that Batista was in gross violation of “conflict of interest” rules when he voted as a shareholder to approve the 2013 balance sheet of OGX while also serving as OGX’s chief executive. Yesterday’s ruling was the second time that the same regulator (C.V.M) found Batista liable for corporate misconduct.
Mr. Batista’s legal team are appealing the first ruling while promising to do the same with yesterday’s. OGX’s downfall led to a criminal case against Batista on charges of stock market manipulation as well as insider trading. That case, however, hasn’t gone far given the “intricacies” of Brazil’s legal system.
Brazil, a Porsche, the Judge, and Batista
Batista’s criminal case on the aforementioned charges began last year but was suspended in February in a bizarre twist. The judge in charge of the case was caught on “film” driving a Porsche owned by Mr. Batista; it was the same Porsche that the same judge ordered seized just months prior to his joyride.
Heloisa Estellita, a professor of criminal law at the Fundacao Getulio Vargas law school in Sao Paulo, has told numerous news outlets that while the trial should have been resumed immediately, Batista has been given the benefit of the doubt given his past riches (and hidden money).
“It’s a common strategy for defense lawyers to try to delay trials until the statute of limitations frees defendants,” she said.
She also pointed out that even if convicted it would be “very difficult” for prosecutors to ensure that Batista ever saw the inside of a jail cell.
“If convicted, he would be a first-time offender, and sentences of up to four years can be converted to community service.”
For now, this high-profile case will simply leave Batista unable to serve on the board of a publicly traded company for five years time.