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By Guillermo Parra-Bernal, Silvio Cascione
3 Min Read
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SAO PAULO/BRASILIA, June 28 (Reuters) – Shares of Hypermarcas SA, the largest Brazilian producer of generic drugs, had their biggest intraday plunge in four years on Tuesday, on reports that a former senior executive admitted paying bribes to ruling coalition politicians.
In a securities filing, Hypermarcas said an independent audit found that Nelson Mello, a former institutional relations director, authorized expenses on his own initiative without the required proof of services rendered. Mello agreed to reimburse the company for any losses or damage caused, the filing said.
According to newspaper O Estado de S. Paulo, Mello admitted to prosecutors paying 30 million reais ($8.85 million) in bribes to senators of the PMDB party. Estado said Senate President Renan Calheiros and former Planning Minister Romero Jucá, both from the PMDB, were recipients of the bribes.
Mello, who left Hypermarcas in March, could not be reached for comment. A spokeswoman for Jucá denied the report, while representatives for Calheiros did not respond to a request for comment.
Hypermarcas said in the filing that it is not the target of an investigation.
The stock shed 8.5 percent to 25.95 reais on Tuesday. The drop pared back year-to-date gains to about 21 percent.
“The news is disturbing – How is it possible that 30 million reais were spent without ‘accountability?’ What were Mr. Mello’s motivations?” Credit Suisse Securities analysts led by Tobias Stingelin wrote in a client note.
The situation underscores how current corruption investigations in Brazil are triggering warning signs among dozens of Brazilian companies, as findings of corruption, graft and bribery rings spread to more sectors of the economy.
Hypermarcas did not detail the alleged payments, which according to Estado were brokered by two lobbyists representing PMDB senators.
The PMDB was the largest ally in President Dilma Rousseff’s coalition. Her vice president, Michel Temer, also a senior PMDB member, is replacing her while she faces impeachment trial at the Senate for breaching budgetary rules.
Mello’s plea deal with prosecutors is not related to the corruption investigation centered on state-controlled firms. Estado said prosecutors will ask the Federal Supreme Court for permission to continue investigating both senators, who have immunity from prosecution by low-tier courts.
$1 = 3.3901 Brazilian reais Additional reporting by Lisandra Paraguassu; Editing by Jeffrey Benkoe, Bill Trott and Bernard Orr
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