By Rogerio Jelmayer
SÃO PAULO--Brazil's largest retailer said it has opened an
investigation into allegations that company officials may have paid
bribes to a top aide to President Dilma Rousseff to win the
approval of 2013 merger between two appliance chains.
Companhia Brasileira de Distribuicao, which is controlled by
France's Groupe Casino, said in a statement Monday that its board
of directors has "unanimously resolved" to request the Audit
Committee to initiate an investigation" into a suspected bribery
scheme reported by local news magazine Epoca over the weekend.
Groupe Casino, which in July 2012 purchased its stake in CBD,
formerly known as Grupo Pão de Açúcar, denied knowledge of the
alleged wrongdoing, which allegedly occurred in late 2010.
CBD's Brazilian shares dropped 1.08% in early trading in São
Paulo, while its ADR fell 0.94% in New York. São Paulo's stock
exchange index, the Ibovespa, was up 0.04%.
Citing a secret investigation by federal prosecutors, Epoca says
authorities suspect CBD made cash payments of 5.5 million reais
($1.8 million) in late 2010 to win regulatory approval to combine
its Ponto Frio appliance unit, Brazil's No. 2 appliance retailer,
with rival Casas Bahia, the nation's No. 1 chain, a merger that had
sparked antitrust concerns.
Epoca said the illicit payments were made to lawyer Marcio
Thomas Bastos, a former justice minister, who transferred the funds
to Antonio Palocci, Ms. Rousseff's former chief of staff and one of
the coordinators of her first election campaign in 2010.
Mr. Palocci and his representatives couldn't be reached for
comment. A spokesman for Ms. Rousseff didn't respond to a request
for comment. Mr. Bastos died in November 2014. Mr. Palocci has
denied any wrongdoing, according to Epoca.
A spokeswoman for the federal prosecutor's office declined to
comment.
CBD acquired control of Casas Bahia in 2009. Brazil's antitrust
agency, CADE, ultimately approved the merger in 2013, but ordered
CBD to sell 74 appliance outlets. A spokeswoman for CADE didn't
respond to a request for comment.
CBD, which also owns the Pão de Açúcar and Extra supermarket
chains, posted 72.8 billion reais in revenue last year.
In a Monday research note to clients, Credit Suisse equity
analysts said the allegations "might add volatility to
GPA's...shares depending on the outcome of the internal
investigation and further news on this subject. On the other hand,
we believe that GPA's board['s] prompt action is the right course
of action to address the situation."
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
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