Brazil's Batista Faces Criminal Charges
Prosecutors Ask for Freezing of Assets
SAO PAULO—Brazil's federal prosecutors have filed criminal charges against Eike Batista, a once high-flying Brazilian businessman, compounding his legal troubles.
Prosecutors in Rio de Janeiro charged Mr. Batista with financial crimes and requested the freezing of 1.5 billion Brazilian reais ($640 million) in assets belonging to the businessman and people close to him, according to documents posted on the public prosecutor's website.
A judge will now examine the charges and decide if the case should go ahead, according to Sergio Bermudes, Mr. Batista's lawyer. Mr. Bermudes told The Wall Street Journal that the businessman's legal team will prove that the charges are untrue.
The entrepreneur could face as many as 13 years in prison if convicted, the prosecutors' office said in a statement . Such an outcome for a wealthy individual, though, would be unusual in Brazil. The nation's justice system can take years to bring people accused of a crime to trial, and even when a case does reach court, the outcome is far from certain.
Federal officials accuse Mr. Batista of manipulating financial markets by claiming to be ready to invest as much as another $1 billion in his distressed oil company, formerly known as OGX Petroleo e Gas Participacoes SA, but never putting in the money, even when the company was in distress. Mr. Batista has said that he didn't invest because the company's situation changed after he made the commitment.
Prosecutors also say Mr. Batista took advantage of privileged information on more than one occasion in 2013 when selling shares of OGX.
The public prosecutor's office couldn't be reached for comment.
The request to freeze Mr. Batista's holdings includes financial property and real estate, as well as assets given by the businessman to his girlfriend and to two of his sons.
If Mr. Batista is convicted, the assets would be used to pay fines, the costs of a trial and damages to victims of his crimes, prosecutor Orlando Monteiro Espindola da Cunha said in court documents.
Once the richest person in Brazil, Mr. Batista was forced to sell assets and lost most of his fortune after his oil company failed to meet targets for production and revenue. His wealth declined from more than $30 billion in 2012 to less than $1 billion at the beginning of 2014.
Earlier this year, the Federal Police started a criminal investigation of Mr. Batista over allegations of infractions connected to the troubled oil firm, following an administrative probe by Brazil's financial market regulator. Mr. Batista also faces civil lawsuits from investors in his company.
In an interview with The Wall Street Journal in April, after the investigation became public, Mr. Batista denied any wrongdoing. He said he was calm and wanted everything to be clarified. "Let them investigate, " he said.