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Brazil prosecutors file criminal charges against Eike Batista

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Brazilian federal prosecutors have filed criminal charges against highprofile businessman Eike Batista and asked a federal court to freeze up to 1.5 billion reais ($642.3 million) worth of the former multibillionaire’s assets.

Prosecutors in this metropolis said Saturday they accused Batista of “market manipulation” and “improper use of privileged information,” crimes punishable by up to 13 years in prison.

The office said it has requested that assets including houses, apartments, boats and airplanes be frozen to compensate investors who lost money when several of Batista’s businesses, most of them listed on the Sao Paulo Stock Exchange, went bankrupt.

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“The amount is equivalent to the harm endured by stock market (investors) as a consequence of the criminal conduct led by the accused,” prosecutors Rodrigo Ramos Poerson and Orlando Monteiro da Cunha, who brought the charges, wrote.

They accused Batista, formerly Brazil’s richest individual and the world’s seventhwealthiest person, according to Forbes magazine, of deceiving investors and manipulating markets by promising to inject $1 billion into one of his companies OGX, now known as Oleo e Gas Participacoes and then failing to exercise that put option.

The prosecutors also accused the businessman of insider trading, saying he used privileged information to make 260 million reais (some $111.3 million) on the sale of shares in OGX.

Batista’s EBX Group conglomerate denied that Batista used privileged information, saying that in that case he would have sold his entire stake in OGX, which filed for bankruptcy protection in October 2013 after missing a $45 million payment on its bonds.

In June, a Rio de Janeiro court ratified a restructuring plan for Oleo e Gas that the company’s creditors had earlier voted to approve.

A month earlier, a Rio court ordered a total of 122 million reais (some $52.2 million) in assets held by Batista to be frozen, heeding a request from prosecutors investigating him for similar financial crimes.

OGX, Batista’s flagship company, was founded in 2007 and shortly afterward was awarded exploration rights for 21 blocks off Brazil’s coast.

That company’s financial woes came to light last year, when it admitted that output at its promising Tiburao Azul offshore field would come in well below production targets due to technical difficulties in extracting the crude.

As part of Oleo e Gas’s restructuring plan, creditors agreed to exchange $5.8 billion in debt for company stock.