Alberto Safra: heir accuses brothers of manipulation – 02/07/2023 – Market

It looks like a fictional script (those who have seen Succession, from HBO, may see similarities), but it is not.

In a lawsuit filed a week ago in the New York court, Alberto Safra, billionaire heir to the banking family, says he was the victim of manipulation headed by two of his brothers so that he lost strength and stake in the holding company that controls Safra National Bank. , in the United States, SNBNY.

The bank, which is unrelated to Banco Safra in Brazil, manages US$9 billion (about R$46.5 billion) in assets. The New York headquarters is located on 5th Avenue in Manhattan, often remembered for its luxury stores and tourist attractions.

In the process, Alberto says that the bank changed its accounting parameters to inflate the value of Safra National Bank by more than US$ 870 million (about R$ 4.50 billion), a maneuver that would have allowed the issuance of new shares distributed only to Jacob and David.

The operation would have resulted in the reduction of Alberto’s shareholding in the institution, from 28% to 13.48%. Until 2019, when the operation was carried out, each of the three heirs who worked in the Safra family business had 28% of the shares. Another sister, who was not involved with the activities, had 16%.

With the new shares issued in December 2019, Jacob and David now own 39.4% of shares. The sister now has 7.7%. In May 2020, part of the shares of the two brothers (called class B shares) were transferred to the sister, who once again had a 16% stake. Jacob and David now have 35.26% each.

“The transactions had no legitimate economic purpose or business logic, and did not result in any benefits to SNBNY or its subsidiaries. The only effect of these transactions was to dilute Alberto’s stake in SNBNY and inflate the stakes of his brothers, David and Jacob, without them (or anyone) having invested any additional capital,” write Alberto’s representatives in the lawsuit.

This all would have happened, according to the heir in the action, when the patriarch, Joseph Safra (who died in December 2020), was seriously weakened. “David and Jacob took advantage of Joseph’s condition to improperly influence him and to obtain his alleged approval for corporate actions hostile to Alberto,” the petition in the lawsuit reads.

In addition to his brothers, Alberto also sues his mother, Vicky, and three SNBNY directors, Carlos Alberto Vieira, Carlos Cesar Bertaco Bomfim and Simoni Passos Morato. All, according to Alberto Safra’s request, would have committed acts of prevarication to harm their interests in the bank.

The family, according to Alberto’s claim in the lawsuit, alleges that the changes in resolutions that allowed the dilution of their shareholding would have occurred with Joseph’s consent. They would be a response to the patriarch’s dissatisfaction with his son.

For Alberto, however, his father, at that point, would not have been able to decide and approve or he would have done so under the influence of the others. The increase in Jacob and David’s shareholding also affected the size of their sister’s shares.

According to Alberto’s lawyers, the dilution of the sister’s stake demonstrates “that David and Jacob were just taking advantage of Joseph’s weakened condition to consolidate their stakes, forcing changes that the father would never have approved if he had been in his right mind.”

The billionaire asks the Supreme Court of the State of New York to restore his shareholding to 28% and recognize his right to appoint a director to the bank’s board. According to him, the bank’s management repeatedly refused to approve the nomination to which he would be entitled as a shareholder.

In the action filed on February 3, he also questions the delay in disclosing the accounting revaluation that allowed the brothers to increase their shareholding. Occurred in 2019, the operation would only have appeared in the balance sheets in June 2021.

“This delay raises further questions about whether the unexplained increase in revenue may have been an accounting ploy,” the lawsuit says. The petition forwarded to the New York court also points to the existence of “inexplicable inconsistencies” between the filings registered in the United States and those sent to Gibraltar (where the holding company is headquartered).

The background to the fight for ownership interest in Safra de New York is the dispute started by the brothers even before the death of the patriarch.

Alberto and David shared the command of Safra in Brazil until 2019, when the former left the bank and founded ASA Investments under rumors that both had fallen out. On the way out, Alberto took executives from Safra to the ASA, which would have displeased his father, who ended up disinheriting him.

The other brother named in the lawsuit, Jacob, runs the family’s international businesses, such as real estate assets and the Sarassin bank in Switzerland.

In a note, the Safra family does not comment on the accusations made by the heir in relation to the accounting operations carried out at the end of 2019, but refutes the allegations. In the statement released this Tuesday, the family says they regret the path taken by Alberto.

See the note in full:

“A few months after receiving a donation from Mr. Joseph, in anticipation of his inheritance, Alberto left Banco Safra, without heeding the appeals made personally by his father and started a business competing with Banco Safra, having even harassed and hired several executives from the group.

On that occasion Mr. Joseph spoke to several executives asking them not to accompany Alberto on his undertaking, as it was an affront to himself. After several refusals by Alberto to change his plans, Mr. Joseph disowned him and took action at that time.

Now Alberto promotes a dispute against the whole family, saying that his father would have no reason to do what he did, claiming it was a conspiracy to harm him. The family regrets the path taken by Alberto, who first attacked his father while he was alive and is now attacking his memory, and refutes his allegations.”