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Brazil's CVM fines Banco Pan, holding company for financial irregularities

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Brazil's CVM fines Banco Pan, holding company for financial irregularities

Brazilian securities and exchange commission CVM has imposed a total of 52.97 billion Brazilian reais in fines on Banco Pan SA, its holding company Silvio Santos Participações Ltda and several of the bank's board members and auditors for financial irregularities, Valor Econômico reported.

The irregularities pertain to "the preparation, analysis and disclosure of financial information of the company, which would have been subject to accounting manipulation," CVM said in a statement.

Specifically, Banco Pan, formerly known as Banco Panamericano, was held liable by the regulator for "drawing up a definitive prospectus for the initial public offering of shares with relevant information that does not correspond to the reality of the financial institution." Meanwhile, the holding Silvio Santos is penalized for acts indicating abuse of power, including the use of the bank's resources to fulfill its own obligations and bonus payments to the management and persons associated with the Silvio Santos group.

For these liabilities, Banco Pan and Silvio Santos Participações were charged fines of 500,000 reais and 38.1 million reais, respectively.

Seventeen of the bank's board members and auditors were also convicted of individual infractions and were given fines. Five of these people were among the seven directors earlier convicted by a Brazilian federal court for financial crimes committed between 2007 and 2010.

As of Feb. 27, US$1 was equivalent to 3.25 Brazilian reais.