CVM Reportedly Probing Cosan

Brazil’s SEC, the CVM, is considering taking action against Brazilian sugar refiner Cosan, which is reorganizing to incorporate in Bermuda, according to a report in Brazilian daily Estado de São Paulo. Cosan raised $1.05bn with its US IPO and Brazilian market follow-own last Thursday via Credit Suisse, Goldman and Morgan Stanley. According to Estado, the CVM is trying to determine if the company’s proposed shareholder reorganization violates the rules of the Novo Mercado and the recently updated laws governing corporations. Potential penalties reportedly include a $30m fine and dismissal of board members. Under Cosan’s reorganization, controlling shareholder Rubens Ometto will receive 10 votes for each share, ensuring control of Cosan with just 10% of Cosan’s stock. In addition, any deals done in the US would not require Brazilian shareholder approval. The CVM has set a deadline of this Thursday for minority shareholders in Cosan SA, the Brazilian company, to decide whether to participate in the public exchange offering for shares in Cosan Ltd., based in Bermuda.