October 23, 2017 / 5:29 PM / a year ago

Brazilian police say France's Casino bribed officials -reports

SAO PAULO, Oct 23 (Reuters) - Brazilian federal police have sent a report to the country's top appeals court alleging that French retailer Casino Guichard Perrachon SA, owner of Brazilian retailer GPA, paid bribes to the wife of a government official to block a deal promoted by a major shareholder, Brazilian media reported on Monday.

According to newspapers O Estado de Sao Paulo and Folha de Sao Paulo, police allege that Casino officials paid several bribes to the first lady of Minas Gerais state starting in 2011, in an attempt to influence her husband, who was then trade minister. The bribes were also meant to influence the former head of national development bank BNDES, which the trade ministry oversees, the papers said.

At the time, Brazilian tycoon Abilio Diniz was the controlling shareholder in GPA, but was slated to cede control to Casino via a previously negotiated dilution arrangement. Before the dilution occurred, however, he started negotiating the acquisition of the local unit of competing retailer Carrefour and turned to BNDES to finance it.

Casino, which now controls GPA, lobbied against the loan, saying the acquisition was a complex ploy by Diniz to maintain control of GPA, which Diniz denied. They said such an acquisition would breach contracts between Casino and GPA.

BNDES sided with Casino. Diniz left GPA in 2013 and, after buying shares in Europe, is an influential shareholder in Carrefour SA, locally present through Grupo Carrefour Brasil .

According to the police report, Casino paid bribes of about 3 million reais ($933,000) via an intermediary to Carolina de Oliveira, wife of Minas Gerais governor Fernando Pimentel. At the time a minister, Pimentel lobbied with BNDES president Luciano Coutinho to block a BNDES loan, the report said.

Brazil's top prosecutor office will decide whether to bring charges against any of the parties involved in the alleged bribery scheme.

In a statement to Reuters, Casino said it had cooperated with authorities throughout the investigation and was surprised by "their mistaken conclusions."

Brazilian federal police and BNDES declined to comment.

In statements to newspaper Estado de Sao Paulo, Pimentel, Oliveira, and Coutinho denied wrongdoing and said the denial of the BNDES loan was done via normal channels.

Oliveira and Coutinho could not be immediately reached for independent comment. A representative for Pimentel said that various investigations against Pimentel had been abandoned for lack of evidence and the latest charges are based on "inference and speculation."

Brazilian shares in GPA were down 0.9 percent in afternoon trading, while Paris-listed Casino was off 0.3 percent. ($1 = 3.22 reais) (Reporting by Gram Slattery; Editing by Andrea Ricci)

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