Oi defends company, officer against allegations tied to settlements

By Caroline Salls

Pittsburgh, Aug. 26 – Oi SA reiterated its position that a company legal representative will be acquitted in connection with accusations that the legal officer took part in a scheme that affected clients, according to a 6-K filed with the Securities and Exchange Commission.

The company said a complaint filed by the State Public Prosecutor of Passo Fundo against Oi chief legal officer Eurico Teles resulted from settlements entered into in legal proceedings underway in Rio Grande do Sul.

Specifically, Eurico and others allegedly agreed to hand over R$50 million to an attorney representing thousands of holders of claims against the company to allow for a reduction in settlement amounts deposited with the court.

Oi said it found itself grappling with hundreds of thousands of lawsuits involving financial participation agreements.

Despite its efforts to legally defend itself in all of the individual proceedings, “the issue reached massive proportions, damaging not only the business management of Oi, but also the proper functioning of the local judiciary,” the company said.

As a result, Oi said it tried to settle with the greatest number of claimants possible. The company said these transactions total close to R$638 million, including R$63.8 million related to attorney’s fees.

However, the company said “the amounts received by the claimants’ representatives, all through legal mechanisms, regrettably were not passed along, in whole or in part, to the respective clients, which, obviously, results in civil and criminal liability solely for these attorneys, and not for Oi or its legal representatives.”

Oi said claimants’ attorney Maurício Dal Agnol’s license was temporarily suspended by the Rio Grande do Sul Chapter of the Brazilian Bar Association, and Oi was asked to make a statement, always as a witness.

On March 14, the Magistrate of the 8th Criminal Court of the Central Forum of Porto Alegre accepted a recommendation to exempt the company’s employees from any criminal liability on the matter, the company said.

Oi, based in Rio de Janeiro, is a telecommunications service provider. The company filed for bankruptcy on June 21 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 15 case number 16-11791.

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