Former TAP CEO suspect over former Varig subsidiary

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The former CEO of TAP, Fernando Pinto has been made a formal suspect in an investigation over the purchase of Brazilian airline carrier Varig’s  engineering and maintenance subsidiary.

The investigation into the purchase of VEM (Varig Engenharia e Manutenção) is being investigated by the Portuguese judicial police (Polícia Judiciária) in which the former CEO and current consultant, has been made a formal suspect investigated for gross mismanagement.

The airline Varig, founded in 1927, was, between 1965 and 1990 Brazil’s largest international airline.  It was wound up on 20 July 2006.

In order to raise funds, the Bankruptcy and Reorganisation Court decided to sell two of Varig’s subsidiaries including the maintenance centre VEM which was sold to a consortium presided by TAP Portugal.

According to the daily newspaper Público, an inquiry which resulted from an anonymous denouncement made at the end of 2010, is being investigated by the Portuguese criminal investigation department DCIAP.

In addition to Fernando Pinto, there are five other managers who made up TAP’s board who also have been made legal suspects for the same reason: suspected, in addition to gross mismanagement, of having illegally profited from the business.

The inquiry has not, however, found evidence of corruption or capital laundering. Questioned on the case, Fernando Pinto said that he has “already given full explanations that have been asked of me by the investigators and believe that the facts in question have been totally made clear.”