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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (15338)	5/17/1999 3:49:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil Senate forex probe seen losing steam ReutersPlus, Monday, May 17, 1999 at 15:13 BRASILIA, May 17 (Reuters) - A Brazilian Senate probe of insider trading and favoritism during January's shock currency devaluation has faded from the political radar screen, after weeks of testimony have failed to nail down any wrongdoing, analysts said. While a Senate committee will forge ahead with an investigation into irregularities in the banking system, the high-profile probe of two firms bailed out by the Central Bank on the heels of the devaluation is virtually over. "The two principal points that drew most attention have already been clarified," said Ricardo Pedreira, a political analyst at Santa Fe consulting firm. "Now, the (inquiry) enters a more routine phase, more predictable." Lawmakers said they had concluded a probe into charges that the Central Bank warned some banks in advance of the devaluation, allowing them to make big profits. Brazil's financial markets had feared the inquiry would taint Finance Minister Pedro Malan and other sitting officials just as Brazil is buffing its image abroad. Those concerns have proved unfounded. The Senate investigated allegations that the now-defunct Banco Marka and FonteCindam had access to inside information prior to the mid-January devaluation and then received privileged treatment following the currency's plunge. The two banks would have taken big losses in foreign exchange futures as a result of the devaluation. The Central Bank said it sold the two firms dollars at below-market prices to prevent their collapse on concerns the whole financial system could be at risk. But after weeks of testimony from former Central Bank directors and representatives of the two institutions, the committee ended their investigation last week and began preparing a report that may be out in two weeks. Former Central Bank chief Francisco Lopes provided the probe's only excitement with his emotional refusal to testify and brief arrest in late April. Others also failed to reveal any explicit wrongdoing by senior government officials, analysts said. "The (investigation) did not do any damage to the government," Pedreira said. The Rio de Janeiro state attorney general will continue looking into the two banks and former Central Bank directors, but the media hype surrounding the scandal has mostly died down. The Senate committee will begin investigations this week into alleged tax evasion at banks and will later take a look at institutions that showed surprisingly strong gains after the devaluation. Copyright 1999, Reuters News Service