Virtue is its Own Reward
Sep 1, 2004
Brazilian companies have realized that short-changing their shareholders can be counter-productive. Investors, market regulators and companies are beginning to stamp out abuse.
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Tagging along for corporate governance.
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You don't have to look far for signs of shoddy practice in Brazil's capital markets. The latest blip on analysts' radar screens is a proposed rights offering by Net Serviços, the troubled cable TV operator controlled by Organizações Globo. Telmex, the Mexican telecoms giant, recently bought 34% of Net's voting stock for $130 million.
No date has been set for the offer, under which owners of voting, or ordinary shares (ONs), would be able to buy new shares at a discount to the price offered to owners of preferred, non-voting shares (PNs). If the issue does indeed go ahead, it is likely to precede a change of control. Current legislation prevents foreigners from owning more than 49% of the voting stock of Brazilian cable operators, but a bill in the Senate would relax this limit. Were a change...
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