Billionaire Drahi’s Right-Hand Man Put Under Spotlight in Corruption Probe

Patrick Drahi’s right-hand man for more than two decades had a reputation for discretion, but is now in the spotlight as the most prominent target of a probe into the inner workings of the French billionaire’s telecommunications empire, Altice.

(Bloomberg) — Patrick Drahi’s right-hand man for more than two decades had a reputation for discretion, but is now in the spotlight as the most prominent target of a probe into the inner workings of the French billionaire’s telecommunications empire, Altice.

Armando Pereira, 71, is in police custody in Portugal after being detained last week in connection with what authorities said was a years-long criminal investigation into private corruption, tax fraud and money laundering.

Pereira’s lawyers say he’s the victim of a trial by the media which has found him “guilty in public opinion” and that the “reality is not so simple,” according to their emailed statement on Tuesday. About 10 Altice employees have been suspended following the probe.

Portuguese investigators are examining contracts with roughly 60 of Altice’s suppliers in the country, but the probe could spread to the group’s broader procurement practices, since some Portuguese suppliers also served Altice in France. Altice has suspended the contracts in question and launched internal audits in every region in which it operates, the company said in a statement Wednesday.

Pereira, the co-founder and former chief operating officer of Altice, no longer holds an executive role at the company, but his connections to Drahi and the group run deep. He has been one of Drahi’s most trusted collaborators and advisers, and an architect of the group that grew through debt-fueled acquisitions in Europe and America, including French carrier SFR Group, Suddenlink and Cablevision in the US and a major stake in the UK’s BT Group Plc. 

‘The Barefoot Billionaire’

A fan of rally car racing and an automobile collector, Pereira was born into “the poorest family” of Guilhofrei, near Braga in Portugal, according to his autobiography titled The Barefoot Billionaire. He immigrated to France in 1966 and climbed the ranks of a construction company before launching his own cable installation business in 1985, which he later sold for €31.5 million. 

He met Drahi, who was starting a cable operator, in the mid 1990s, and they co-founded Altice in 2002 with the goal of consolidating cable players like “Cable Cowboy” John Malone had done in the US.

Drahi handled the global strategy and finances, while Pereira was responsible for executing the technical side of operations, including negotiating procurement contracts — with a playbook of asking for 30% rebates from suppliers, according to reports. 

Pereira was notoriously media shy but known inside the company as a ruthless cost-cutter who slashed French carrier SFR’s headcount by a third — roughly 5,000 jobs — after Altice bought it in 2014. He took a similar approach in 2015 when Altice bought the Portuguese assets of Portugal Telecom. 

“He was a nice person, friendly, serene, even a bit shy,” said Jorge Felix, president of The Union of Altice Portugal Workers, who met him in 2015 after the PT acquisition. “He was also very determined and was quick to point out that the company had an excess of about 5,000 workers at the time.”

Pereira was listed as COO of Altice Europe in notices to shareholders in 2021 and, until last week, he was present at Altice headquarters in Paris and approving bills exceeding €200 ($224), according to the French CDFT union. 

Son-in-Law Investigated

Pereira’s connections to Altice suppliers had already faced some scrutiny. In 2014, a French court found that Pereira was a shareholder of ERT, then a major partner of Altice in the construction of cable networks, through a Luxembourg holding, according to a 2018 Le Monde article. An Altice spokesperson said at the time that Pereira founded ERT in 2000 and sold it around 2013, before it started dealing with Altice.

After meeting with Altice France’s management yesterday, the CDFT union wrote in a memo seen by Bloomberg that the company is “seeking to understand the extent and depth of corruption within the group,” and hopes that “tongues will be loosened within the company about problematic practices witnessed by employees.”

The extent of Pereira’s wealth is unknown. While he was an Altice shareholder during its early years, it’s unclear whether he still owns shares in companies linked to Altice or Drahi. A representative for Drahi declined to comment.

Pereira’s son-in-law Yossi Benchetrit has been placed on leave from his role as Altice USA’s chief procurement officer while it carries out an internal investigation, the company said. Last year, Benchetrit and his wife, Gaelle Pereira, bought a $70 million penthouse in New York’s Park Avenue, one of the city’s most expensive residential sales of the year.

The French union said it fears that the Portuguese investigation will have a “reputational” impact for Altice, “particularly vis-à-vis creditors and future lenders, when the group will once again need to raise debt in 2025.”

The company’s bond prices have slumped over the past week amid a surge in volume, a signal that investors have been shaken, for now at least, by the probe.

–With assistance from Henrique Almeida.

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