Alexandre Fonseca, chairman of Altice USA and co-CEO of Altice Group, suspended himself from all executive and non-executive duties at the company after a corruption probe launched by authorities in Portugal.
Fonseca’s stepping back from his duties comes after Armando Pereira — co-founder of Altice Group, Patrick Drahi’s leading cable and telecom company — spent the weekend in custody as part of an investigation into suspected corruption, fiscal fraud and money laundering, according to French reports. Fonseca is also targeted in the investigation, per Le Figaro newspaper.
Altice Portugal confirmed on July 13 it was one of the companies searched by the Portuguese authorities in compliance with a warrant issued by the Public Prosecutor’s Office as part of an ongoing investigation directed against individuals as well as entities outside Altice Group. “Altice Portugal is providing all the cooperation requested and will always be available for any clarification,” the company said.
Altice Group said Fonseca has suspended all of his “executive and non-executive roles” for the company in several geographies. “With this decision, Alexandre Fonseca is looking to fully protect and safeguard the Altice Group’s best interests and all its brands, in an ongoing public process, where allegedly, there are facts under investigation which occurred in the timeframe where he was the CEO of Altice Portugal,” Altice Group said in a statement Monday. “This posture from Alexandre Fonseca comes as responsible on the path to clarification of the truth.”
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On July 15, Fonseca resigned from the board of Altice USA, according to an SEC filing Monday. On July 16, the board appointed Altice USA CEO Dennis Mathew as a director of the company effective immediately and elected Mathew as chairman.
Altice USA said it has launched an investigation into the “circumstances in Portugal.” During the U.S. company’s investigation, Altice USA chief procurement officer Yossi Benchetrit has been placed on leave.
“Altice USA is an independent, U.S.-based company, and, in response to the circumstances in Portugal, we immediately launched an internal investigation,” an Altice USA spokesperson said. “While we conduct this investigation, our chief procurement officer has been placed on leave to ensure the company retains its focus on its operations and serving customers. We conduct our business with the highest integrity and will continue to move forward operating our business with the best interest of our stockholders, customers, and employees at the forefront.”
Altice USA provides broadband, TV and phone service to nearly 5 million residential and business customers across 21 states through its Optimum brand. In 2018, Altice USA spun off from Altice Group (which at the time was called Altice Europe); Drahi controls both companies, which are led by separate management teams.
Pereira was placed in custody after his home was raided as part of 90 searches conducted at private homes, businesses and law firms across the country last Thursday and Friday, according to French reports.
Portugal’s Central Department of Criminal Investigation and Prosecution (DCIAP) said “the suspicion which prompted the probes indicate that the process of decision making within Altice was biased in terms of how contracts were obtained.” These practices “caused a prejudge to companies that are part of Altice as well as their competitors,” said the DCIAP.
