SAO PAULO, July 25 (Reuters) - Telefonica Brasil SA , the country’s largest wireless carrier, is investigating whether contracting practices at its marketing division failed to meet internal guidelines and allowed excessive price discrepancies, Valor Econômico newspaper reported on Monday.
The internal probe, which is being led by an independent auditing firm hired by parent company Telefónica SA, has already triggered a restructuring of the division’s command and a thorough scrutiny of contracts, suppliers and contractors, Valor said, without specifying when it began.
Telefónica Brasil, which controls Brazil’s leading wireless carrier, Vivo, spends an annual 1.3 billion reais ($395 million) on marketing and advertising, Valor said. Telefónica Brasil declined to comment on the Valor report.
Contracts with some of Brazil’s biggest ad agencies, including Omnicom Group Inc’s Africa, DPZ&T and Young & Rubicam, were evaluated in the probe and kept, the report said.
Telefónica Brasil is still looking for an executive to lead marketing affairs after the June dismissal of the area’s former head, Cristina Duclos, Valor said.
Efforts to reach Duclos for comment were unsuccessful.
The situation highlights growing demand to strengthen corporate governance and compliance units in listed companies following the eruption of a series of scandals involving some of Brazil’s biggest state-controlled and privately owned firms.
Preferred shares of São Paulo-based Vivo shed 1 percent to 47.15 reais on Monday, cutting year-to-date gains to 36 percent.
$1 = 3.2874 Brazilian reais Reporting by Ana Mano; Editing by Guillermo Parra-Bernal and Dan Grebler