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Regulator finds 'no irregularities' in Banrisul share auction

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Regulator finds 'no irregularities' in Banrisul share auction

Brazil's securities regulator CVM did not find any "indications of irregularities" regarding Banco do Estado do Rio Grande do Sul SA's selling of shares, according to a filing from the state-run bank.

The regulator's probe followed a complaint by an investor and an investigation by state prosecutors into Banrisul's stake auction held in April.

The government of Brazil's Rio Grande do Sul state sold 2,974,500 shares in Banrisul in two separate auctions on April 10 and April 27, generating 485 million Brazilian reais and 52.5 million reais to the state, respectively. The state's public prosecutors are reportedly investigating claims that shares were sold below the minimum share price of 17.65 reais in the second auction.

According to earlier reports, investigators said the price could have been "significantly below that which is practiced in the market, with enormous loss to the public patrimony." The case was reportedly launched after a tip-off from an official whose name is being withheld from the public.

Following media reports earlier this month, Banrisul said it had no knowledge of the investigations and denied all wrongdoing.

As of July 26, US$1 was equivalent to 3.73 Brazilian reais.