Altice co-founder placed under house arrest in Portugal in corruption probe

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Armando Pereira, who co-founded telecoms and media group Altice alongside French billionaire Patrick Drahi, has been placed under house arrest in Portugal on the order of a judge as public prosecutors investigate corruption allegations against him.

The investigation centres on whether Pereira and businessman Hernâni Vaz Antunes, who was also placed under house arrest by a judge late on Monday, were involved in a scheme to rig the French group’s local procurement processes in Portugal.

The Portuguese case erupted earlier this month when Pereira was detained as part of the probe into alleged corruption, tax fraud and money laundering, and Altice’s offices in the country were searched by police following a three-year investigation.

The fallout has since shaken the broader Altice group, which has operations in the US and Europe and is known for its debt-fuelled acquisition spree under Drahi that included the €17bn takeover of France’s SFR in 2014.

The company said it had launched its own internal investigation and suspended several employees, including in procurement.

The chair of Altice USA, Alexandre Fonseca, who was chief executive of the Portuguese business when some of the alleged schemes were put in place, is on leave, the company said. Pereira has denied wrongdoing. Antunes’ lawyer declined to comment.

Altice has said it is co-operating with investigators and has “allegedly been defrauded as a result of harmful practices and misconduct of certain individuals and external entities”.

In an internal memo to French employees seen by the Financial Times, Altice executives said the company was reviewing its supply chain approvals in Portugal and had suspended any suspicious payments.

Portuguese judges must decide whether Pereira and Antunes are to be formally charged in court. Prosecutors had asked that both men be taken into custody, but a judge opted for house arrest with no electronic tagging.

After the decision, Pereira’s lawyer said: “At least, he’s going to sleep at home with his family. It is much preferable to being in [prison].”

The Portuguese investigation into financial irregularities at Altice has been codenamed Operation Picoas after the Lisbon neighbourhood where Altice has its country office.

Prices of Altice’s tens of billions of dollars of bonds across its businesses around the globe have slumped since the tax fraud revelations first emerged.

Unsecured bonds at its main French telecoms unit are trading as low as 35 cents on the euro, suggesting that investors are braced for heavy losses.

Drahi, who is based in Switzerland, took the once-listed European operations of Altice private again in 2021 after founding it in 2001.

Pereira, once one of Drahi’s subcontractors working on installations in his early cable ventures, has long had influential roles in the business, including in procurement.

Altice USA remains listed, with Drahi as its biggest shareholder. The French businessman had recently increased Altice’s stake in Britain’s BT to 18 per cent, though said he had no intention of trying to take control of the former British monopoly.