By Brazil Stock Guide — Oncoclínicas (ONCO3) has been served in a public civil lawsuit filed by the Brazilian Association for Investment, Credit and Consumer Affairs, or Abraicc, seeking compensation for current and former shareholders of the cancer-care company.
The case, pending before São Paulo’s 3rd Business and Arbitration Disputes Court, names both Oncoclínicas and Anbima, Brazil’s financial and capital markets association, as defendants. The company said on Tuesday it is within the deadline to file its defense.
Abraicc is seeking joint and several liability against the two defendants for losses allegedly suffered by shareholders and former shareholders who acquired ONCO3 shares either in the company’s initial public offering or in the secondary market. The requested compensation would be based on the price those investors would have received under the mandatory tender offer, or OPA, provided for in Oncoclínicas’ bylaws.
The lawsuit gained significance after Brazil’s Securities and Exchange Commission, known as CVM, ruled unanimously in August that a corporate reorganization involving Josephina III, a fund linked to Centaurus Capital, had triggered the mandatory tender offer provision in Oncoclínicas’ bylaws. The issue had been taken to the regulator by Latache, one of the company’s largest shareholders.
The dispute escalated further in September. Funds managed by Latache, which together own more than 5% of Oncoclínicas, requested a shareholders’ meeting to suspend Josephina III’s voting rights until the tender offer obligation is fulfilled. Oncoclínicas’ board approved the calling of the meeting without taking a position on the merits of the request.
Abraicc’s lawsuit opens a separate legal front. In addition to investors who still own ONCO3 shares, the action seeks to cover former shareholders who have already sold their holdings and claim they were harmed because the tender offer was not launched when it should have been.
The association is also seeking an additional award of R$50,000 per current or former shareholder, or another amount to be determined by the court, to be paid into the São Paulo State Fund for the Reparation of Harmed Diffuse Interests.
The CVM ruling does not automatically establish liability for either Oncoclínicas or Anbima. The company said no ruling on the merits has yet been issued in the case and that it will take the appropriate legal measures to defend itself.
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