Case Detail

Case Summary

Citigroup’s Shareholder Tango in Brazil (A)

Case Number: 5-307-502(A), Year Published: 2007, Revision Date: September 27, 2013

HBS Number: KEL328

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Key Concepts

International Business, Corporate Governance, Shareholder Rights, Pyramidal Groups, Joint Ventures, Ownership Structure, Asset Shifting

Abstract

Citigroup has discovered that Daniel Dantas, hired five years earlier to manage Citigroup's $750 million private equity investment in a Brazilian telecommunications industry joint venture, has allegedly mismanaged more than $300 million in assets and contracts. Dantas’s misconduct relates to his management of Citigroup’s CVC Fund and II-FIA, a legal entity representing a group of large Brazilian pension funds. Together with Dantas’s Grupo Opportunity, CVC and II-FIA own Brasil Telecom, the third largest telecommunications company in the country. The partnership’s pyramidal ownership structure makes his actions difficult to track. Citigroup must quickly determine how to disrupt Dantas’s intricately woven web of control without allowing him to extract further value from the partnership. This case provides concrete examples of the expropriation risks joint venture partners face when unfamiliar with pyramidal group ownership structures.

Spanish translation available.

Number of Pages: 16

Extended Case Information

Teaching Areas: Strategy

Geographic: Brazil

Industry: Telecommunications

Organization Name: Citigroup

Organization Size: Large

Decision Maker Position: VP of Global Investments

Decision Maker Gender: Female

Year of Case: 2005