Charles Sirois is a Canadian telecom entrepreneur whom a Canadian magazine article once labeled "the next master of the universe." His company, TIW, led by Bruno Ducharme, is a global mobile communications company with investments in Romania, the Czech Republic, India, and Western Europe. In 1995 Sirois had invested in telecommunications in Brazil in partnership with Daniel Dantas, a brilliant financier in Brazil who ran an investment banking company called Banco Opportunity SA.
In 1998 the Brazilian government began to sell off its telecommunications companies to private owners. TIW and Opportunity, led by Dantas, joined with a third party, a group of Brazilian pension funds, to form a consortium called Telpart. In turn, it bought two cellular phone companies formerly owned by the government, with a total of nearly 2 million customers.
But while the negotiations were optimistic and the Canadians went public about the trust everyone showed, and all three parties concurred in a nonbinding Memorandum of Understanding, the three never wrote a formal shareholder agreement. On the basis of trust TIW had put about U. S. $ 266 million into the Telpart consortium, acquiring 49 percent of it.
Two weeks after the consortium was formed, Dantas began to change the ownership balance. He persuaded the third party, the pension funds, to join with Opportunity and create another company (Newtel) that would own 51 percent of Telpart. TIW was subsequently a minority, not majority, partner. TIW agreed to the new structure on the condition a formal agreement would be written to assure that TIW shared control of Teleport.
After 18 months of negotiation no agreement was produced. Meanwhile, Dantas had begun appointing directors and dictating policy for Telpart and controlling what Telpart did and did not do. TIW took Dantas and Newtel to court. In fact, about 20 lawsuits ensued, and nasty public allegations flew on both sides before Sirois finally pulled TIW out of Brazil in 2003, selling assets that had cost U. S. $266 million five years earlier for less than U.S. $50 million.27 The agreement made on trust and handshakes was unenforceable when one player changed the rules. Without a written agreement, TIW could not win in court.