UPDATE 1-Prosecutor investigating suspected fraud at Portugal Telecom SGPS

martes 6 de enero de 2015 10:36 GYT

(Updates with details, background)

LISBON Jan 6 (Reuters) - Portugal's prosecutor general has carried out searches at Portugal Telecom SGPS on suspicion of fraud related to an investigation into the company's financial investments, the prosecutor said on Tuesday.

The prosecutor's office said in a statement the investigation was taking place together with the CMVM market regulator, judicial police and tax authorities.

"This investigation relates to suspicions...of fraud, with the financial investments of the company being under investigation," the prosecutor said.

Paulo de Sa e Cunha, the lawyer representing PT SGPS, told journalists "the searches are taking place as people already know."

He added that the case was covered by Portugal's legal secrecy laws, which mean that details cannot be made public. Nobody at the company commented.

Shares in Portugal Telecom were 2.09 percent lower.

Portugal Telecom made an investment of nearly 900 million euros last year in commercial paper issued by Rioforte, a holding company of the Espirito Santo banking family, just a few months before Rioforte and the family went bankrupt.

The default led to the resignation of Portugal Telecom SGPS chairman Henrique Granadeiro in August. Portugal Telecom said at the time that its executive board had never approved or discussed any investment in debt issued by Rioforte.   Continuación...