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Ex-tycoon Batista jailed in graft probe on return to Brazil

By Pedro Fonseca and Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - Eike Batista, once the richest and most outspoken cheerleader for Brazil's ill-fated commodities bubble, flew back to Rio de Janeiro Monday and was arrested at the airport by federal police over corruption allegations after four days as a fugitive.

Batista, a brash entrepreneur whose meteoric rise and fall made him the poster boy of a decade-long boom in Brazil that turned to bust three years ago, is accused of paying a former Rio state governor millions in bribes. A warrant for his arrest was issued on Thursday.

Batista has not been formally charged. Under Brazilian law, only prosecutors can file charges, after police conclude an investigation.

The 60-year-old businessman, who has sold or forfeited his stakes in the energy, mining and logistics empire known as EBX Group, was once married to a Carnival queen and is the son of a former chief executive officer of mining company Vale SA.

Five years ago, he had a net worth exceeding $30 billion and was considered one of the world's 10 richest people. On Monday, he had his hair implants shaved off before he was locked in a shared cell in Rio's notorious Bangu prison, authorities said.

"I am returning to answer to the courts, as is my duty," Batista told the Globo television network at New York's JFK airport. "It's time for me to clear this up."

In May, Batista showed up at the southern Brazil offices of federal prosecutors leading a huge probe into political kickbacks made by scores of major companies, in return for lucrative contracts from state-run oil company Petroleo Brasileiro SA.

Batista told prosecutors at the time that former Finance Minister Guido Mantega had requested, and he had made, a contribution of 5 million reais ($1.60 million) to cover debts from the successful 2010 presidential campaign of former President Dilma Rousseff, who was impeached last year for breaking budget rules.

Mantega was charged with corruption in September, due in large part to Batista's testimony, prosecutors said. Both Mantega and Rousseff deny wrongdoing.

The sweeping corruption investigation, which now covers several state-run companies, has jailed prestigious CEOs and major political figures, convicted more than 80 people and confirmed some $2 billion in bribes paid over several years.

New testimony from plea bargains approved on Monday is expected to implicate more than 100 sitting politicians.

"I think federal prosecutors are cleaning up Brazil in a fantastic manner," Batista told Globo TV. "The Brazil that is being born now will be different."

He added that he never intended to flee and was in New York on business. Batista declined to answer a reporter's question about whether he considered himself guilty or innocent.

Batista's lawyer, Fernando Martins, told reporters outside a prison where the businessman initially was taken that he had not yet spoken with his client but that he was worried about his safety.

Inmates with a college degree, which Batista lacks, are usually separated from the rest of the population in Brazil's crowded prison system, where a series of violent riots have erupted this year.

A former wildcat gold miner, Batista attracted ravenous demand for shares in his mining and energy ventures, which were forced into bankruptcy court as oil and mineral prices crashed.

Police accuse Batista of paying $16 million to former Rio Governor Sergio Cabral in exchange for support of the businessman's many Rio-based endeavors.

Cabral, who resigned from office in 2014, has been jailed since last year in connection with other corruption charges. His lawyers have denied he committed any crimes.

The oil companies OGX Petroleo e Gas SA and Oleo e Gas Participações SA and mining company MMX, which were founded by Batista, said on Monday that he no longer held administrative roles, and his arrest would have no impact on them.

(Reporting by Pedro Fonseca and Rodrigo Viga Gaier; Additional reporting by Brad Brooks in Sao Paulo and Paulo Prada in Rio de Janeiro; Editing by Lisa Von Ahn and Tom Brown)

 

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