Anglo American’s acquisition of IronX Mineração from Eike Batista’s mining company MMX will go ahead despite the investigation into Batista’s alleged fraud, say both parties.
The transaction is on course for completion on 5 August, with Anglo American satisfied by Batista’s pledge to indemnify the company for any losses suffered as a result of the investigation.
Paulo de Gouvêa, Batista’s main legal advisor says, “We are being absolutely transparent, which is the way that we conduct business.”
The allegations of possible fraud in the award of a concession for the Amapa railroad, as well as allegations connected to gold smuggling, which prompted the Federal Police’s investigation were reported by LATINLAWYER.
Speaking at the start of the investigation, Gouvêa told MMX investors that Anglo would review all documentation to assess whether there could be an adverse effect on the transaction.
“What we are doing is giving full disclosure by Anglo American and we do not view this as any kind of breach under the agreement,” he says.
Gouvêa adds that the indemnity offer was already written into the sale contract, and not a special measure.
He explains, “this would not represent any burden to MMX’s balance sheet, this would be Eike Batista, the individual, who would be giving; and this is something that would effectively cure any alleged misrepresentation or breach in the agreement or any allegation that the material adverts changed, and conditions of the business of the company. “
Batista has said the allegations are “false and totally unfounded”, calling the police investigation “a gigantic mistake.”
Counsel to MMX
In-house counsel – Paulo de Gouvêa and Claudio Lampert


Davis Polk & Wardwell
Partners John Amorosi, Manuel Garciadiaz, Kathleen L. Ferrell and Diane Kerr and associates Joana Benjamin, Paul Hodgdon, and Oliver Smith
Gibson, Dunn & Crutcher LLP
Partners Kevin W Kelley and Helena Berti and associates Lisa Alfaro and Bernardo Coindreau

Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados
Partner Carlos Barbosa Mello and Moacir Zilbovicius and associates Angélica Pedroso and Paula Vieira de Oliveira

Counsel to Anglo American

Sullivan & Cromwell LLP
Partner Sergio J Galvis and associates Werner Ahlers, Arianna Pretto-Sakmann and Jaime Ramirez

McCarthy Tétrault LLP
Partners Sven Milelli and Roger Taplin

Machado, Meyer, Sendacz e Opice Advogados
Partners In Hee Cho, José Roberto Opice, José Ribeiro do Prado Júnior and Eliana Ambrósio Chimenti, associates Watson Possato, Fernando Tonanni, Liliam Yoshikawa, Flávia Ferraz, Milton Pinatti Ferreria de Souza
(Latin Lawyer online 29.07.2008)