By Luciana Magalhaes
SAO PAULO--French retail group Casino Guichard-Perrachon SA
(CGUSY, CO.FR) Wednesday asked Brazilian businessman Abilio Diniz
to resign as chairman of the board of Brazil's largest retail
group, Grupo Pao de Acucar, or GPA, preempting a potential conflict
should he join the board of another Brazilian company.
Mr. Diniz recently has invested in shares of Brazilian food
company BRF-Brasil Foods SA (BRFS3.BR, BRFS) and there has been
speculation he could soon be elected to BRF's board, perhaps even
as chairman.
GPA is formally known as Companhia Brasileira de Distribuicao SA
(CBD, PCAR4.BR).
According to a person who was at a meeting of GPA shareholders
Wednesday, Casino's representatives said there would be "a
situation of clear conflict of interests" if Mr. Diniz were to
remain on GPA's board. The person said Marcelo Trindade,
representing Wilkes Participacoes SA, which controls GPA, said at
the meeting BRF is a major supplier to CBD and the two firms have
an "intense" commercial relationship.
According to another person with knowledge of Mr. Diniz's
comments at the same meeting, the executive noted the two firms
weren't competitors, and neither had any power to influence the
behavior of the other.
"For that reason, there's nothing in Brazilian law, or in the
shareholders agreement with Casino, that prevents my eventual
participation in the board of directors at both companies," Mr.
Diniz said.
Mr. Diniz and Casino owner Jean-Charles Naouri have had open
conflicts in recent years after Mr. Diniz attempted to back out of
a 2005 deal to hand over the control of GPA, founded by his family.
Casino took control of Grupo Pao de Acucar earlier this year, as
agreed to by contract, after Mr. Diniz attempted in 2011 to merge
GPA with the Brazilian unit of Casino's rival in France, Carrefour
SA (CRRFY, CA.FR).
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com
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