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Ex-billionaire testifies to Brazil parliamentary committee

November 17, 2015

RIO DE JANEIRO (AP) — Brazil’s one-time richest man said Tuesday that errors including an excess of optimism contributed to the downfall of his much-hyped oil, mining, logistics and ship-making empire.

Eike Batista, the flamboyant former billionaire whose meteoric rise and equally spectacular fall has come to symbolize the fate of his nation, was testifying before a parliamentary panel probing the estimated $2.5 billion in loans that Brazil’s national development bank made to his portfolio of companies.

He insisted that loans from the BNDES development bank represented only a fraction of the total financing pumped into his companies, much of it foreign investment. He added that his debt to the bank was “100 percent insured” and that he doesn’t owe it any money.

However, Batista, who topped out on the Forbes billionaire list at No. 7 and bragged he was about to oust Mexico’s Carlos Slim from his then-top spot, has acknowledged $1 billion in debts to other creditors. In Tuesday’s testimony he said he would resolve that debt within the next 10 days, but didn’t provide details.

He blamed his downfall on an overly rosy idea of how much the oilfields that served as the jewel in his industrial crown would actually produce.

“I was optimistic to believe my oilfields would have that oil and that it would be necessary to build my own rigs and platforms,” Batista said, adding “that was my error.”

The unravelling of Batista’s empire over the last nearly three years is widely seen here as a symbol of the fate of Brazil’s economy at large. After years of being widely regarded as among the world’s most bullish, the Brazilian economy is now in recession, with inflation and unemployment on the rise.

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