RE: Telegraph Article23 Jul 2023 14:24
Altice Portugal, which has not been accused of wrongdoing, said it had started an internal investigation of its procurement and real estate sales and has suspended payments to entities targeted by the authorities.
Pereira no longer holds executive roles at Altice. Still, the scandal has shaken the foundations of the telecoms empire he helped to build.
“It’s obviously bad because it throws into doubt the reliability of the organisation and the governance,” says François Godard, an analyst at Enders Analysis.
“It has the immediate effect of forcing the company to scrutinise everything. You stop all your dealings, you stop all new contracts, you look at existing contracts and you have to run checks on all supply agreements.”
Godard adds: “Even if in a few months’ time we see that it was limited to one person and a few suppliers, in the meantime the whole business has been disrupted.”
Drahi is now battling to contain the fallout from the scandal.
Altice insists that its operations in Portugal are separate from the rest of the group. However, there are already signs the shockwaves from Pereira’s arrest will spread through the wider business.
Alexandre Fonseca, Altice Group’s co-chief executive and US chairman, this week announced he was temporarily stepping down.
Altice said the move was designed to “fully protect and safeguard” the company during an investigation into events that happened while Fonseca was chief executive of the Portuguese division.
In a defiant LinkedIn post, Fonseca insisted he knew nothing about the corruption claims, following up with the Martin Luther King quote: “Injustice anywhere is a threat to justice everywhere”.
Altice USA chief procurement officer, Yossi Benchetrit, has also been placed on leave during an internal investigation, as have several employees in the group’s Portuguese operations.
Dennis Mathew, chairman and chief executive of Altice USA, wrote in an internal memo seen by The Telegraph: “We take this investigation very seriously and will continue to act diligently and with urgency to make decisions that are in the best interest of our employees, customers, and shareholders.”
He urged staff not to be distracted by “speculation and rumours” in the media.
However, in France, where Altice owns mobile network SFR and news channel BFM, employees are starting to worry.
Portugal has become strategically important for Altice France, with various suppliers based in the country.
Earlier this week, union chiefs met with Arthur Dreyfuss, chief executive of Altice France, and Mathieu Cocq, head of SFR, to express their concerns about the investigation and the potential impact on jobs.
One union, the CFDT, said it was worried about reputational damage from the saga, “particularly vis-à-vis creditors and future lenders, when the group will once again need to raise debt in 2025.”
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