Abilio Diniz, Brazilian retail tycoon, under Fire for Suspicious Payments

After a months long journalistic investigation started by Brazilian Magazine “Revista Epoca”, Brazil’s largest retailer admitted that it is unable to account for payments totalling $2.48million made by Grupo Pao de Acucar (GPA) between 2009–2011 to the law firm of former Justice Minister Marcio Thomaz Bastos. It is suspected that these payments were used to encourage President Dilma Rousseff to approve a merger between Brazil’s two largest retail firms.

GPA said in a statement dated April 2015 that its board of directors had unanimously agreed to move forward with an Audit Committee investigation into suspected brivery. The board indicated that they would be investigating allegations that company officials paid bribes to top government officials, including President Dilma Rousseff’s aid, to secure approval of a merger.

Epoca cited a secret federal investigation, claiming that Pao de Acucar is suspected of having made payments totally approximately $1.8million USD in late 2010 to combine Ponto Frio, then Brazil’s number two appliance retailer, with Casas Bahia, Brazil’s retail giant.

Payments made to Marcio Thomas Bastos

It was during this period that supposed payments were made to former Justice Minister Marcio Thomas Bastos, now deceased, who then transferred the funds to Antonio Paloccio, President Rousseff’s former chief of staff and campaign coordinator. Brazil’s antitrust agency, meant to prevent collusion, approved the merger in 2013 — long after the final payments through Bastos’ law firm.

Should the coming weeks reveal that under Diniz’s control Pao de Acucar did, in fact, make payment to Brazilian politicians for huge personal gain, it would be sure to have a further impact on Pao de Acucar’s already falling stock prices.

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