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Citigroup Sued Over Lawsuit in
Brazil
A global investment fund manager
has filed a civil suit against
Citigroup, charging that the New
York-based financial institution
improperly interfered with the
investment fund's operations in
Brazil, lawyers said Tuesday.
Globalvest Management Co. is seeking at least $300
million in punitive and compensatory damages.
It alleges that a Brazilian fund manager affiliated with the bank
tried to force Globalvest to sell shares in two Brazilian
telecommunications company at less than market value.
"Citibank has ... interfered with Globalvest's business," said Jeff
Boxer, a lawyer with Carter, Ledyard, & Millburn, which is
representing Globalvest in the suit filed on Oct. 14 in New York.
Globalvest is also suing the Brazilian investment manager, Daniel
Dantas, and his company, Opportunity Equity Partners. Opportunity
Equity is a private-equity fund in which Citigroup is the sole
investor. That suit is being pursued in the Cayman Islands.
The lawsuits come at a time Citigroup is facing allegations of
trading breaches in Britain and has seen its private-banking license
canceled by regulators in Japan.
Globalvest's lawsuits were in response to a suit filed by
Opportunity Equity in Brazil. That suit alleges that Globalvest used
its stakes in two Brazilian cellular phone companies to illegally
gain control over them.
Globalvest, a company run by emerging-market veteran Peter Gruber,
says the charges in the Brazilian lawsuit are baseless and that the
real reason behind the lawsuit was to force Globalvest to sell its
shares at below market value.
"After the (Brazilian) lawsuit was filed, the funds that own stock
in Brazilian telecommunications companies were frozen so that they
can't be redeemed," said Boxer in telephone interview from New York.
"What's happening in Brazil has damaged the business."
The lawsuit has effectively frozen the funds with stakes in the
cellular companies Telemig and Tele Norte so no new investors can
buy into them.
Globalvest, which is based in the U.S. Virgin Islands, claims that
before the lawsuit, Opportunity Equity had tried to buy Globalvest's
shares in the two cellular phone companies. When Globalvest wouldn't
sell, Opportunity Equity brought the suit, Globalvest alleges.
Dantas, the manager of Citigroup's private-equity investments in
Brazil, has been the target of several legal challenges after
clashing with several major Brazilian pension funds as well as
companies such as Telecom Italia and Canada's Telesystem
International Wireless Inc.
No one was available at Opportunity Equity to comment on the case,
because it is a national holiday in Brazil.
Colombian
bishops urge rebels to negotiate
The vice president of the Colombian
bishops conference, Archbishop Augusto Castro, has called on the
leaders of the rebel Armed Revolutionary Forces of Colombia (FARC)
to consider a government proposal calling for negotiations, to be
held under the aegis of the apostolic nuncio.
Archbishop Castro heads the Church commission which has been in
contact with the rebels in order to help bring about an agreement
that will secure the release of hostages. Speaking on Radio Caracol,
the archbishop said, “This proposal is in response to the need to
find solutions at a time in which we were all worried we had reached
a dead-end.”
Colombia’s President Alvaro Uribe, proposed this weekend the
possibility of a meeting between the government’s chief negotiator
for peace, Luis Carlos Restrepo, and representatives of FARC at the
apostolic nunciature for a maximum period of five days in order to
finalize a humanitarian agreement.
The government wants the FARC to free policemen and soldiers that
have been kidnapped, as well as that of ex-presidential candidate
Ingrid Betancourt and three US advisors. The FARC wants the
government to release 50 rebel soldiers from prison.
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