Citigroup ousts Brazil PE manager

Citigroup has cut ties with Daniel Dantas, a controversial figure managing the bank’s private equity investments in Brazil.

Global bank Citigroup has reportedly severed ties with its private equity fund manager in Brazil following a number of scandals.

Daniel Dantas, the owner of the Brazil-based Opportunity Asset Management, managed the $650 million (€483 million) CVC/Opportunity Equity Partners Fund. The fund is controlled by Citigroup and based in the Cayman Islands.

A spokesperson for the bank told the Wall Street Journal that the decision came after a “thorough review”, but did not comment further.

Dantas has been mired in a number of lawsuits recently, including a contested stake in the Brasil Telecom phone company. Dantas has reportedly been sued by a number of Brazilian pensions.    

In 2003, a UK court ruled that the fund had to offer a fair price for shares held by former CVC/Opportunity Equity Partners employee Luis Demarco.

Demarco was dismissed by the firm in 1999 for alleged bad performance. Following his dismissal, Demarco attempted to sell his 1 percent holding in the fund to the majority shareholders for fair value. The majority shareholder offered Demarco $1 for his stake, an offer which Demarco rejected.

Demarco subsequently petitioned the court of the Cayman Islands, where the CVC fund is incorporated, to wind up the general manager. The general manager then obtained a court injunction against the petition. Five UK Law Lords have now overturned that injunction, ruling that Demarco was only seeking to realise the valuation of his investment as a result of his exclusion from the fund’s management team.

In 2000, Dantas was sued by a number of limited partners, including Canadian communications firm Telesystem International Wireless, as well as Brazilian pension funds Previ, Petros, Funcef and Telos. The limited partners wanted a greater say in the decision making process in the management of companies Telemig Celular and Tele Norte Celular.