Armando Pereira and Hernâni Vaz Antunes are accused of rigging local procurement processes in Portugal, among other things
Armando Pereira, Co-founder of telecoms and media group Altice alongside French billionaire Patrick Drahi, is under house arrest in Portugal on the order of a judge. He was originally detained 12 days ago as part of an investigation into alleged corruption, tax fraud and money laundering. He has denied all charges.
The investigation hinges on whether Pereira and businessman Hernâni Vaz Antunes were involved in a scheme to rig the French group’s local procurement processes in Portugal. Vaz Antunes was also placed under house arrest on Monday.
The Portuguese case broke earlier this month when Pereira was detained and Altice’s Portuguese offices searched by police after a three-year investigation.
Defrauded of hundreds of millions?
Local media reports the investigation is looking into the sale of various buildings in Lisbon when Alexandre Fonseca was CEO of Altice Portugal, between November 2017 and April 2022. The sales allegedly deprived the company of hundreds of millions of euros.
Altice said it is carrying out its own internal investigation and has suspended employees, including some involved in procurement. Fonseca, now chair of Altice USA, is on leave according to the company.
Portuguese judges must decide whether Pereira and Antunes are to be formally charged in court. Reuters reports that prosecutors asked for both men be taken into custody, but a judge opted for house arrest with no electronic tagging.
The Portuguese investigation into financial irregularities at Altice has been codenamed Operation Picoas after the Lisbon neighbourhood where Altice has its office.
Prices of Altice’s tens of billions of dollars of bonds across its businesses around the globe have slumped since the tax fraud revelations first emerged. Unsecured bonds at its main French telecoms unit are trading as low as 35 cents on the euro, suggesting that investors are braced for heavy losses.
Drahi, who is based in Switzerland, took the once-listed European operations of Altice private again in 2021 after founding it in 2001. Pereira started as a subcontractor working on installations for Drahi’s y cable ventures, but moved into influential roles in the business, including procurement.
A history of debt-fuelled acquisition
The Altice group has operations in the US and Europe and is best known for leveraging debt in aggressive takeovers of telecoms companies which some see as asset stripping.
Altice struck a deal to buy the Portuguese assets of Portugal Telecom from Brazil’s Oi in a €7.4 billion deal in late 2014, following a €17 billion takeover of France’s SFR in 2014. In June 2015 it acquired Telecom Portugal for €5.3 billion, with remedies imposed by the European Commission. It was fined it €124.5 million in April 2018 by the Commission for implementing its acquisition of the operator before notification or approval by the Commission.
It owns a 24.5% stake in BT and there was speculation fuelled by unnamed City of London sources that it would increase this to 29.5%, fuelling more speculation that it intended to mount a takeover bid. This is has been repeatedly denied by Drahi and is highly unlikely to be allowed by the government both on grounds of the National Security Act designed to protect critical national assets and the damage done to Altice’s reputation.