Zeinal Bava, the PT boss who quit for Brazil when the Rioforte loan scandal hit the headlines, has been kicked out of the Brazilian company Oi.
The official announcement will be made later this week but the departure of Zeinal Abedin Mahomed Bava from the COE job at the Brazilian telecoms giant marks the end of appointments that gave the distinct impression of rewarding failure.
The Brazilian press has been hinting that all was not well at the top of Oi and that management changes were afoot.
The latest inside knowledge is from ‘Veja’ which writes that the probable replacement for Bava will be announced earlier this week and that Bayard Gontijo, the currently chief financial officer of the company, will very likely take over from the Portuguese boss.
Bava is being sacked after mounting pressure from shareholders BTG Pactual and from Otavio Azevedo from Grupo Andrada, who, well aware that Bava ran PT during a period that saw covert multi-million loans frequently made to Rioforte, part of the Espirito Santo empire.
Powerful Oi shareholders no longer have confidence in Bava's abilities but it is his past myopia and lack of probity in overseeing dodgy loans to a PT shareholder's company (Rioforte) that has left them little option if they want to run a clean ship.
Bava was appointed CEO of Oi in June 2013 when also CEO of PT Portugal. Then in August 2014 the Brazilian telecom company announced that Bava would leave the PT board in order to focus on running the new telecommunications company formed by the merger of Portugal Telecom and Oi.
The discovery that Portugal Telecom had an investment of €900 million in commercial bonds issued by Rioforte, which then defaulted leaving PT in a state of fiscal nudity, was the main factor in Baval’s removal. The only question in Lisbon is why did it take so long?
The Rioforte default not only moved the goalposts in the Oi/PT merger, it changed the whole playing field as the Portuguese telecoms monopoly was suddenly €900 million the poorer with no chance ever of recovering the full amount from Rioforte.
This weakened PT’s position in the negotiations at a crucial time and two Brazilian directors on the PT board resigned and flew back to Rio as news of the Rioforte loan default surfaced.
In August 2014 Henrique Granadeiro 'resigned' from the board of PT, claiming that he wanted to defend the "interests of shareholders," and wrote that he always had acted "in the best interest of PT, its employees and all its shareholders."
This astounding statement was echoed at his final shareholder meeting as he left still thinking he had done a good job in overseeing the loss of €900 million of shareholders’ cash.
