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Batista Faces Trial as Outraged Brazil Middle Class Watches

Tuesday, 18 November 2014 01:53 PM

When a Rio de Janeiro prosecutor pressed criminal charges against Eike Batista in mid-September, the former billionaire decided to let off steam by breaking a yearlong public silence and give some interviews.

It was a “giant blow” to become middle class again, he told newspaper Folha de S. Paulo on Sept 17. Like the 58-year- old entrepreneur’s business strategy, the move backfired spectacularly.

The comments were greeted with outrage and mockery in a country where the minimum wage is less than $300 a month. Among those raising their eyebrows was Judge Flavio Roberto de Souza, the man presiding over a trial against the former billionaire for alleged insider-trading and market manipulation.

“He’s not the Brazilian middle class because no middle class person earns about a million reais ($380,000) a month” as he does, Souza said in an Oct. 9 interview at his office in Rio’s Third Federal Criminal Tribunal, decorated with Buddhist artwork. “There’s social pressure created by the defendant because he’s a person who always liked to appear in the media.”

The trial’s first hearing is scheduled to start at 2 p.m. in Rio today. If found guilty, Batista may be sentenced to as many as 13 years in prison, on top of facing the ignominy of being Brazil’s first inmate for capital-market crimes. The entrepreneur’s lawyers have repeatedly said Batista is innocent and didn’t reply to an e-mail seeking comments yesterday.

Not Intimidated

Souza, a devout Buddhist who says he learned Tibetan to attend spiritual retreats in Nepal and India and meditates for about 40 minutes each day, said he isn’t intimidated by the publicity surrounding the case.

He said in a Nov. 9 telephone interview that he expects to have a verdict by early 2015 after new witnesses were called to participate. While discouraged from expressing opinions about trials in interviews, judges in Brazil are allowed to discuss information that isn’t considered potentially harmful.

Speaking at the court today, Judge Souza said being a Buddhist helps him remain calm during trials. “It gives me the serenity to examine the proof without attachments.”

The trial is resonating with Brazilians as it’s unusual to see a prominent businessman being judged for insider-trading charges, said Leonardo Theon de Moraes, head of corporate and bankruptcy law at Sao Paulo-based law firm Theon de Moraes & Britto Sociedade de Advogados.

Brazilians are demanding evidence that “the law works, that offenses are being punished,” he said by telephone. That pressure “will fall mainly onto the judge.”

Batista is far from being the only target of public outrage in Brazil recently.

Corruption Probe

A probe into corruption at Petroleo Brasileiro SA, the government-run oil company, has led to uproar on social media and helped polarize voters in an election that saw President Dilma Rousseff win another four years in office last month. Petrobras has said it’s collaborating with investigations and is a victim in the case.

Batista’s oil, shipbuilding and main mining ventures were forced into bankruptcy protection after mounting debt, a cash shortfall and deteriorating investor confidence led them to collapse last year. In September, federal prosecutors in Rio and Sao Paulo accused the tycoon of breaching rules when he sold shares of his OGX and OSX units in three instances in 2013.

When approached by Bloomberg News at the entrance of a Japanese restaurant in the Rio neighborhood of Botafogo on Nov. 12, Batista said he was in “restructuring” mode. Unshaven and dressed in blue jeans and a denim shirt, the entrepreneur who was a celebrity while Brazil’s richest person and retired from the public eye after the demise of his resources empire, declined to elaborate.

In 2011 he vowed to become the richest person in the world. In September, he said in the Folha interview that he has a negative net worth of $1 billion. He also told the newspaper he never had any intention of deceiving investors and didn’t use privileged information in doing business.

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When a Rio de Janeiro prosecutor pressed criminal charges against Eike Batista in mid-September, the former billionaire decided to let off steam by breaking a yearlong public silence and give some interviews. It was a "giant blow" to become middle class again, he told...
batista, billionaire, brazil, middle, class
Tuesday, 18 November 2014 01:53 PM
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