Bandeirantes Squeals on New Abril Deal

Brazilian tax man probes funky dealings, reports a business rival of the Grupo Abril

Announced nearly a year ago, the purchase of a 30% equity state in Editora Abril by the South African communications group Naspers is being investigated by the federal tax authorities for “obscurity in the terms of the contract.” The deal was valued at US$422 million. According to a report by TV Band, the Brazilian firm MIH Brazil Participações — represented as the buyer — is a “ghost” corporation and has no legal existence.

Brazil’s TV Bandeirantes reports on new equity transactions at the Grupo Abril, which sold a 30% participation to South African media and Internet giant Nasper last year.

Band, as it is known, is involved in a heated commercial dispute with Abril — publisher of Veja magazine and employer of Diogo Mainardi — at the moment. See Bandeirantes Pulp Mainardi!

Bandeirantes recently launched an (utterly toxic) channel that competes with Abril’s (utterly toxic) MTV Brasil.

A deal between Abril and the Spanish Telefónica is also causing controversy. See GatoNet Fights Telefonica-Abril Deal.

The Lusophone Abril’s deal with Mochila Español is just rolling out this month as well, according to an April 11 press release.

Mochila Español launched in September 2006 with Mexico’s largest newspaper El Universal, one of the biggest communication groups in Latin America Editora Abril S/A, Spanish language media company Rumbo and Spanish language weekly newspaper Excelsior. Additional current key members include AP Espanol, dpa en Espanol, Editora Globo, ESPN Desportes, Grupo Diarios de America, Hispanic News Press, Latino News LLC and The Voice.

It recently added the EFE news agency to what it touts as the “first global online marketplace for print, audio, video and photo content.”

Band reports:

Uma empresa que só existe no papel conseguiu a façanha de comprar parte da Editora Abril. O negócio de quase novecentos milhões de reais chamou a atenção da Receita Federal. Confira a matéria exibida dia 17/04, terça-feira, no Jornal da Band.

A company that exists only on paper pulled off the handy trick of buying part of Editora Abril. The deal, worth some R$19 million, called the attention of the federal tax authority. Watch the April 17 report from Band’s nightly newscast.

Band’s online video is not supported by my “open-source Bloomberg box” platform:

O codec de vídeo ‘Windows Media Video 9′ não é suportado. Você pode ter que instalar plugins adicionais para poder reproduzir alguns tipos de filmes

I might have to install additional plugins? You think so? Thanks for that useful advice.

A helpful Ubuntu blogger says I just need to open up a shell and type

sudo apt-get install gstreamer0.10-ffmpeg

Thank you. I will try that.

Nope. Already have that installed.

But Gstreamer has other plugins, sorted into “good,” “bad” and “ugly.” Maybe it’s one of those.

Band TV PowerPoint on YouTube.

Meantime, Vermelho does a mash-up of the Band reporting with reporting from Adnews. I translate that, too, and will try to clip any other relevant factoids I dig up into the file as I come across them.

Anunciada há cerca de um ano, a compra de 30% do capital da editora Abril pelo grupo sul-africano de comunicação Naspers está sendo investigada pela Receita Federal por “obscuridade nos termos de contrato”. O negócio foi avaliado em US$ 422 milhões. Segundo reportagem realizada nesta semana pela TV Bandeirantes, a empresa brasileira MIH Brazil Participações - registrada como responsável pela compra - é “fantasma”, não existindo legalmente.

Announced nearly a year ago, the purchase of a 30% equity state in Editora Abril by the South African communications group Naspers is being investigated by the federal tax authorities for “obscurity in the terms of the contract.” The deal was valued at US$422 million. According to a report by TV Band, the Brazilian firm MIH Brazil Participações — represented as the buyer — is a “ghost” corporation and has no legal existence.

A equipe de TV teve acesso aos documentos que fornecem informações e paradeiros infundados, em que não se encontram sede ou funcionários - apenas o registro de outra empresa, denominada Curandéia Participações. A reportagem considera o Naspers como apoiador à política do apartheid, responsável por implantar forte segregação racial a partir do domínio de brancos sobre negros na África do Sul.

The Band team had access to documents that provide information and addresses that cannot be corroborated, in which neither a business address or the names of employees are found — merely the registration of another firm, called Curandéia Participações (”investments”). The Band report deems Naspers to be a supporter of the policy of apartheid, responsible for instituting racial segregation based on domination of blacks by whites in South Africa.

Which it clearly was at some point.

All of SA’s apartheid presidents had in common that they had sat on the Naspers board, for example. Just to start with.

De acordo com documentos registrados na Receita Feral, a Curundéia tem três donos. Dois deles com sede internacional - a MIH (UBC) Holdings BV e a Myriad Internacional Holdings BV. A terceira é a Brian Vincent Forssman. Segundo informação da Band, o suposto capital social da empresa fantasma é avaliado em R$ 878 mil.

According to documents on file with the federal tax authorities, Curundéia has three owners, two of them headquartered abroad — MIH (UBC) Holdings BV and Myriad Internacional [sic] Holdings BV. The third owner is Brian Vincent Forssman. According to Band, the equity capital of the phantom corporation is reported as R$878,000.

A person of that name googles up in relation to a Dubai firm called Multichoice Middle East Inc., a “computer components” firm.

A publication called Tele-satellit reported in 1996:

Multichoice Middle East also announced in Dubai that it will begin offering an Arabic language family of program services by mid year. Multichoice will also use Ku band capacity on PAS 4 as well as share a common digital satellite TV (DSTv) conditional access system with SHOWTIME so that viewers will have the option of subscribing to both program packages. The Multichoice package will consist of as many as 28 TV services for the Middle East, including Filmnet and enhanced versions of the ART satellite TV channels which currently air on Arabsat 1D. Echostar, Pace and Panasonic will provide the IRDs for this new service, with the conditional access system and smart card technology to be supplied by Irdeto.

BV indicates a Dutch Besloten Vennootschap, or “limited corporation,” I gather.

MIH Group, according to the Naspers Web site, is:

… a multinational media company with its principal operations in electronic media, including pay-television, internet and instant-messaging subscriber platforms and the provision of related technologies. Its most significant operations are located in South Africa elsewhere in Sub-Saharan Africa, Greece, Cyprus, the Netherlands, the United States, Thailand, China and Brazil. MIH also has print media interests in Brazil, China, Nigeria, Kenya and Angola.

There is, I think I am seeing, an MIH Limited also registered in Dubai — which has a Media City that hosts Reuters and other global media companies, we recall.

Vermelho’s mash-up continues:

Entretanto, a cifra desembolsada para comprar parte da Abril foi de mais de 178 milhões de dólares - o equivalente a cerca de 360 milhões de reais. Ainda segundo a reportagem, o Naspers seria um dos donos da empresa fictícia MIH, que, por sua vez, indica como representante oficial no país a suposta inexistente Curundéia.

In the meantime, the amount shelled out to purchase part of Abril was more than $178 million … Again according to the Band report, Naspers might be one of the owners of the fictious MIH, which, for its part, represents itself as the Brazilian representative of the allegedly nonexistent Curundéia.

30% is the constitutional ceiling on equity participation by foreign media groups in Brazilian media companies, thanks to a constitutional amendment pushed by Cardoso.

It used to be zero percent, as Time-Life found out to its cost during the anos de chumbo.

O que diz a Globo

What they told Globo

Em nota enviada na tarde desta quinta-feira (19) ao site Adnews, o grupo Abril considera as denúncias “improcedentes” e “infundadas”. Afirma também que recorrerá à Justiça contra o grupo Bandeirantes.

In a note sent on Thursday afternoon to the Web site Adnews, the Grupo Abril calls the accusations “unfounded” and “inadmissible.” It also said it would take Bandeirantes to court.

Leia o comunicado na íntegra:

The full text of that statement.

O Grupo Abril esclarece que são totalmente improcedentes e infundadas as acusações e imputações a seu respeito divulgadas pelo Grupo Bandeirantes de Comunicação. A Abril buscará na Justiça a satisfação desse agravo contra a sua honra e o ressarcimento dos prejuízos decorrentes dessas ofensas.

Grupo Abril wishes to state the accusations and imputation about it aired by the Grupo Bandeirantes are inadmissible and unfounded. Abril will seek satisfaction in the courts for this offense against its honor and compensation for damages resulting from these offenses.

Improcedente is an odd term to use in a hot denial, is it not? It is a technical legal term meaning “not actionable.”

A empresa reitera que tem orgulho de sua independência editorial e credibilidade, e assume plena responsabilidade por tudo o que publica ou divulga. Seu compromisso foi, é e sempre será com o interesse público e a saúde das instituições do Brasil”.

The firm reiterates that it is proud of its editorial independence and credibility, and takes full responsibility for everything it publishes or broadcasts. Its commitment has been and will continue to be to the public interest and the health of Brazil’s public institutions.

Who said anything about editorial independence?

This is a deal story, and the only alleged irregularity here is that there are apparently no MIH Participações or Curundéia at the addresses stated. Indeed, one of the São Paulo addresses listed in the contracts it looked at, according to Band’s report, simply does not exist at all.

Editorial independence is another subject entirly.

In my view, Veja magazine quite shamelessly sold its cover story to the iPhone launch, as did Globo’s Época during the same week– and Time magazine, back in gringoland.

See “It’s Like Magic” and “Cellular Revolution”.

Look: Veja simply out and out lies, over and over and over again. Period.

Which is the main reason we do not read it.

Here is the Band report, by the way, which has been uploaded to YouTube.

There is no MIH Brasil Participações at the address stated in its incorporation papers, which is the address of a law firm.

They might have asked the law firm if MIH Brasil Participações was one of its clients, I thought.

CADE, the Brazilian antitrust regulators, has some information on the status of the deal, under “Abril S.A.”

Translation to come. Hora do Povo published a summary, which actually might be easier than subtitling the video. But then again, I love to futz with this stuff.