Brazilian scandal disturbs Gtech
Brazilian scandal disturbs Gtech
Gtech Holdings, an American online lottery systems supplier, was found to abandon its hopes to reach financial results, which they were expecting for the second quarter and fiscal year 2005. Experts intend to explain the situation with a Brazilian federal injunction regarding a corruption inquiry of a former aide to Cabinet Chief Jose Dirceu.
According to Bloomberg News, the company stated it expects to earn 70 cents to 75 cents a share in the second quarter, down from its previous forecast of 75 cents to 80 cents.
In March, the Brazilian government claimed in a report that it had strong evidence that former Dirceu aide Waldomiro Diniz, may have helped Gtech extend contracts in the country. Wall Street Journal revealed that alleged criminal practices in the renewal of an agreement were relate to providing of the company’s online bill-paying and lottery services for Caixa Economica Federal, a state-owned bank that runs Brazil's national lottery.
Gtech, denies any accusations, arguing that the company encouraged Antonio Carlos Rocha, Gtech's former president in Brazil, and Marcelo Rovai, the local marketing director, to "cooperate fully" with investigators.
Gtech is a leading global information technology provider of software, networks, and professional services. Its core market is the lottery industry, with a growing presence in commercial gaming technology and financial services transaction processing. Brazil is its largest overseas market.
