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Altice: Patrick Drahi was warned about Armando Pereira in 2017 – Communications

Altice: Patrick Drahi was warned about Armando Pereira in 2017 – Communications

“Shock” and “disappointment” were the words millionaire Patrick Drahi used to describe how he felt when Altice officials were detained, as part of the arrest operation.

Operation PECOAS, whose main target is Armando Pereira, co-founder of the group.

But Bloomberg reports, based on various testimonies and documents, have already revealed concerns about Altice’s relationships with its largest suppliers, whether workers, unions or consultants.

Altice executives, including at the highest levels, were informed of management problems, possible fraudulent bidding on contracts and alleged favoritism, all linked to Armando Pereira.
The first alert was made in 2017

Concerns about Armando Pereira first arose in 2017, after Patrick Drahi appointed him deputy CEO of French company SFR, which is now Altice France.

At the time, members of the union (CFDT) confronted Armando Pereira over allegations that he had awarded contracts to companies owned by him or his family, bypassing the usual chains of governance for such operations. According to the transcript of the meeting, Armando Pereira was described as “systematically interfering in decision-making processes,” “financial opacity,” and “confusing personal interests with the social purpose of the company.”

“We asked him whether he would work for the company or for his own benefit,” recalls one of the union representatives, Olivier Lelong, in an interview.

Two years later, in 2019, Deloitte raised questions again in an annual report prepared for Altice Europe, which included the operation in Portugal and France. The document cited a “risk of fraud,” including the possibility of making “manual adjustments” to transactions outside the auction system. In other words, the way in which company managers can bypass internal mechanisms created specifically to prevent corruption. The consultant, in a letter to the board that same year in which he did not name specific responsible persons, also emphasized “significant deficiencies in internal control,” including the ease with which anyone could manipulate financial accounting documents. .

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Later, Deloitte was replaced by KPMG. The decision was questioned by a shareholder who asked at a meeting whether the change was due to how “direct” Deloitte had been in its assessment of the company’s governance problems.

Atice workers in the US raise questions about contract awardsEven before the operation began in Portugal, Altice workers in the US had raised concerns, particularly about some suppliers who continued to win contracts to install fiber networks, despite not providing the best value or quality of work. In fact, some senior managers who complained to their bosses about the unfairness of some of these processes were removed from the company.

Since the beginning of the investigation in Portugal, some figures have been removed, including Yossi Benchetrit, Armando Pereira’s son-in-law, who was fired from Altice USA, after refusing to cooperate with the company’s internal investigation. Alexander Fonseca also suspended his duties within the Group’s executive and non-executive business management activities in various geographical regions.

According to sources familiar with the matter interviewed by Bloomberg, Excell Communications — the largest supplier to build the Altice network — and Genesys USA were funded or managed by individuals associated with “Operation Picoas.” Benchetrit and other senior Altice members in the US have lobbied their teams to choose Excell over other companies, even in states where they have no experience.

“Holding” of Hernâni Vaz Antunes acquires supplier from Altice USA in 2018

This preferential selection began after the acquisition in 2018 of Excell Communications by Dunas de Contrastes, a holding company owned by Hernani Vaz Antunes, who is under house arrest and suspected of committing more than 20 crimes of corruption, money laundering and qualifications. Tax fraud. The businessman has already admitted, according to Publico newspaper, that he paid several inappropriate sums to obtain market share and contracts.

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Among the beneficiaries are not only former Altice CEO, Alexander Fonseca, but also co-founder, Armando Pereira, former Altice USA CEO, Achim Boubazin, and Altice USA’s purchasing director and his brother-in-law. Armando Pereira Law, Yossi Benchetrit.

Achim Boubazin was also the founder of Genesys USA in September 2021, after leaving Altice with a $500,000 severance package. Bobazin and partner Denis Ryzhikov acquired two Altice USA suppliers, AM Communications and Scott Fennell, into Genesys, months before the company became an Altice contractor.

After its founding, in February this year, Glenn Jeske, a senior purchasing manager, wrote an email to suppliers stating that they would no longer work with Altice, but would be subcontracted through Excell or one of the two companies owned by Genesys. . This indicator caused confusion among workers due to the lack of experience of the two companies.

Despite not having an executive position at Altice USA, Armando Pereira has always been aware of the evolution of the fiber network, even attending construction sites in the United States and providing technical recommendations to workers on site.

The French federation CFDT reminds Patrick Drahi of warnings dating back to 2017

More recently, in September, the French federation CFDT sent a letter to Drahi explaining how its members had “warned of problems relating to the use of service providers directly or indirectly linked to shareholders” since Altice acquired SFR.

The Union stressed that “this crisis is an opportunity to completely rethink corporate governance, management methods, social dialogue, and value-sharing mechanisms for the group, with the aim of restoring meaning and recognition.”

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Patrick Drahi will meet with the unions on Tuesday for the first time since the investigation into Altice’s offices in Paris began.