RIO DE JANEIRO -- Jair Bilachi, the head of Brazil's biggest pension fund, resigned Dec. 2 because of alleged improprieties surrounding the sale of Tele Norte Leste, one of three fixed-line Telebras phone companies sold in July to a consortium in which the fund was a member.
Mr. Bilachi reportedly was involved in the negotiations that led to the purchase of Tele Norte Leste.
Mr. Bilachi was head of the $16.5 billion Caixa de Previdencia dos Funcionarios do Banco do Brasil, or Previ, the pension fund of the state-owned Banco do Brasil.
Luiz Tarquinio Sardinha Ferro, head of the Banco do Brasil's financing department, was appointed as the new Previ president.
Mr. Bilachi's resignation follows those of Communications Minister Luiz Carlos Mendonca de Barros and Development Bank President Andre Lara Resende, who was in charge of the government's privatization program. Both men stepped down in late November after tapes from an illegal wire-tap revealed they failed to act impartially in the sale of Tele Norte Leste.
It was widely known that the two officials had encouraged the formation of the consortium that bought Tele Norte Leste to increase bidding competition. But the tapes also revealed they openly had favored the Tele Norte Leste bid going to another consortium, whose bid was unsuccessful.
Mr. Bilachi's involvement in the negotiations that led to the purchase of Tele Norte Leste was reportedly not the only reason he resigned.
The Central Bank also had been investigating alleged improprieties at a Banco do Brasil branch in Brasilia at which he was manager and then superintendent before his being appointed to head Previ in 1996.
The wire-tap scandal focused attention on the Central Bank investigation, and the combined scandals forced Mr. Bilachi's resignation. As a consequence of Mr. Bilachi's resignation, Joao Bosco Madeiro, Previ's investment director, also resigned.
A Previ press release said both men stepped down "to preserve Previ from an exploitation of facts that don't involve the institution (Previ) and which, consequently, could interfere in its business operations."