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Brazil football loses profits in bank collapse

August 14, 2013 by  
Filed under Soccer Business

The Brazilian Football Federation (CBF) may lose half of its 2012 profit following the collapse of a bank at the centre of a government corruption scandal.

CBF deposited about $13 million with Belo Horizonte-based Banco Rural over the last decade, however, Brazil’s central bank liquidated Rural earlier this month citing “serious” legal violations, according to Bloomberg.

Rural executives, including former CEO Katia Rabello, were convicted last year by the Supreme Court of money laundering and mismanagement of a financial institution as part of the high court’s ruling in the so-called Mensalao case. Officials from Brazil’s ruling Workers’ Party were found guilty by the Supreme Court of using embezzled public funds and fraudulent loans from Rural to buy votes in the Congress from 2003 to 2005.

The CBF recorded revenues of $166.1 million in 2012 and net income of $24.2 million. Bloomberg said that the Federation risks losing the majority of its money held at Banco Rural because of the terms of the bank’s liquidation. However, Brazilian football’s governing body is said to carry out the majority of its banking with commercial partner Banco Itau.

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