The Brazilian securities regulator (CVM) has ruled that controlling and minority ordinary shareholders cannot vote on a share swap that is dilutive to preferential shareholders, in a move that may undermine the corporate restructuring of the country’s largest fixed line operator Telemar. According to BNamericas, Telemar had planned to simplify its corporate structure, which currently consists of Telemar Participações (TmarPart), Tele Norte Leste Participações (Tmar) and Telemar Norte Leste (TNL), and bring all its shareholders together under a single company. However, some of Telemar’s major shareholders are against the restructuring and are increasing their attempts to stop it. São Diego-based fund Brandes Investment Partners has already attempted to prevent Telemar’s plan, alleging that it would be detrimental to preferential shareholders. The decision by the CVM is another blow to Telemar, which initially planned to launch a share offering, estimated at around BRL3 billion (USD1.33 billion), by July 2006 as part of its planned restructuring. The offering is now not likely to be made before September, the company said.