September 13, 2014 12:30 PMBrazil's Batista Faces Criminal ChargesProsecutors Ask for Freezing of AssetsEike Batista has been traveling while facing criminal charges in Brazil.
SÃO PAULO—When Brazil's best-known businessman was hit with criminal chargesover the weekend involving billions of dollars in soured deals, he didn't appear to miss a beat.
Instead, Eike Batista was roaming the world scouting for business opportunities.
"Yesterday he was in Qatar," said one of Mr. Batista's lawyers, Sergio Bermudes, in a telephone interview Sunday. "It was a business trip." The attorney said Mr. Batista had also planned to go to South Korea and would return to Brazil probably by Friday.
When the entrepreneur lands, he will be facing one of the biggest challenges of his life.
Prosecutors in Rio de Janeiro last week charged Mr. Batista with financial crimes and requested the freezing of 1.5 billion Brazilian reais ($641 million) in assets belonging to the businessman and people close to him, according to documents posted on the public prosecutor's website on Saturday.
Federal officials accuse Mr. Batista of manipulating financial markets and taking advantage of privileged information when selling shares of his distressed oil company, formerly known as OGX Petróleo e Gás Participações SA.
The entrepreneur, who presided over one of the most stunning rise-and-fall stories in the history of business, could face as many as 13 years in prison if convicted. Mr. Batista and his attorneys have repeatedly denied that the businessman did anything wrong.
Once the richest person in Brazil, the 57-year-old entrepreneur lost some $30 billion between 2012 and 2013 after OGX failed to meet production and financial targets. The decline of OGX sent shares tumbling across the rest of his industrial empire, wiping out most of his wealth. Two of his companies, including OGX, have filed for bankruptcy protection while others have been forced to sell key assets or a controlling stake.
A group of international investors, including U.S. companies such as Pacific Investment Management Co., or Pimco, also incurred significant losses after betting on the once-promising oil company. Earlier this year, Pimco and others had to invest even more money in OGX to save it from liquidation.
To make sure that people hurt by OGX's losses will receive damages, the prosecutors in Rio de Janeiro have asked for the freezing of Mr. Batista's holdings. That request includes financial property and real estate, as well as assets that prosecutors say were given by the businessman to his girlfriend and to two of his sons.
If Mr. Batista is convicted, the assets would be used to pay fines, the costs of a trial and damages to victims of his crimes, prosecutor Orlando Monteiro Espindola da Cunha said in court documents.
Mr. Bermudes called the request "an exaggeration," and said that a judge will still need to examine the charges and decide whether the case should go ahead.
A prison sentence for a white-collar, wealthy individual such as Mr. Batista would be unusual in Brazil. The nation's justice system can take years to bring people accused of a crime to trial, and even when a case does reach court, the outcome is far from certain.
Still, small investors, some of whom lost a substantial portion of their savings, cheered the news that prosecutors are pursuing criminal charges.
Aurélio Valporto, a 50-year-old economist who lives in Rio de Janeiro, said he lost 40% of his savings in OGX. Over the past year, he has reached out to the media and to authorities on numerous occasions to make sure the case wouldn't die.
"If it were not for our efforts, this would not be happening," Mr. Valporto said. He sold most of his OGX shares and is now a counselor at a Brazilian association focusing on safeguards for small investors. Mr. Valporto and other investors have also filed lawsuits against Mr. Batista and some other key executives alleging financial losses related to the collapse of OGX.
Federal officials accuse Mr. Batista of manipulating financial markets by claiming publicly to be ready to invest as much as $1 billion in additional funds into his troubled oil company, through a put option, but failing to follow through, even when the company was in distress. Mr. Batista has said that he didn't invest because the company's situation changed after he made the commitment.
Prosecutors also say Mr. Batista took advantage of privileged information on more than one occasion in 2013 when selling shares of OGX before the release of bad news that led to the fall of the those shares. Mr. Batista has denied any wrongdoing.
Earlier this year, the Federal Police began a separate criminal investigation of Mr. Batista over alleged infractions connected to the troubled oil company, after an administrative probe by the Comissão de Valores Mobiliários, or CVM, Brazil's market regulator.
In an interview with The Wall Street Journal in April, after the investigation became public, Mr. Batista denied any wrongdoing. He said he was calm and wanted everything to be clarified. "Let them investigate, " he said.
Once married to a Brazilian sex symbol, with whom he had two sons, Mr. Batista was famous for parking a $1 million Mercedes in his living room and boasting that he would someday surpass Mexico's Carlos Slim as the richest person in the world.
Mr. Bermudes said Mr. Batista now has humbler ambitions. "He is doing what he can to see his group alive," Mr. Bermudes said. "But he doesn't feed the desire to have it the way it was before."
Write to Luciana Magalhaes atluciana.magalhaes@wsj.com
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