Syn wins case against Rio Bravo in a real estate fund dispute



The São Paulo Court of Justice granted Syn a win (the new name of Cyrela Commercial Properties) in a dispute that has been going on for almost three years with Rio Bravo, manager of the real estate investment fund (FII) Grand Plaza Shopping. The fund owns the shopping centre located in Santo André (SP), one of the largest in Brazil, and has Syn as its main shareholder, with a 61.4% stake.


The fight began shortly after the Federal Revenue Service fined the fund R$ 158.9 million in 2019. The fine was based on Article 2 of Law 9,779/99. An FII is subject to taxation applicable to legal entities if it has a shareholder with more than 25% of participation as a partner. The tax authorities understood that the vehicle should pay taxes as a company and not take advantage of the exemption from charging on income and capital gains granted to FIIs.


The problem within the fund itself began at the end of 2020 when Rio Bravo opened a formal consultation with the proposal to split the fund in two: one piece would go to Syn and the fines, and the other piece to the other 19 thousand shareholders. In the vote, however, the administrator disregarded Syn's negative vote on conflict of interest. Until then, the fight was with the IRS.