Portugal Telecom (PT), in the process of combining assets with Oi, is trying to calm its Brazilian partner after buying €897 million of debt issued by Rioforte – a member of the Portuguese Espirito Santo group (GES) – behind its back.

“PT is providing all support to Oi regarding the necessary actions to ensure to Oi the maximum protection of the treasury application in Rioforte’s commercial paper,” said Portugal Telecom in a statement. “PT strongly believes that the various parties, PT, Oi and GES, will be able to find the adequate solutions to protect the interests of both PT and Oi shareholders.”

Oi took umbridge that it was denied any input into Portugal Telecom’s decision to invest in commercial paper issued by Rioforte, a firm linked to Portugal Telecom. Rioforte is controlled by the owners of Espirito Santo Group, which is a major shareholder in the Portuguese incumbent.

Two Brazilian board members of Portugal Telecom resigned after only finding out about the investment through a press release.

Oi claims the decisions that led to the deal were made prior to the acquisition of Oi’s shares by Portugal Telecom in the Brazilian firm’s recently completed capital increase.

Commercial paper is a short-term investment and usually not backed by any form of collateral.

Portugal Telecom’s treasury applications in Rioforte’s commercial paper are due to mature on 15 and 17 July 2014 (€847 million and €50 million, respectively) with an average annual remuneration of 3.6 per cent.

Shares in both Oi and Portugal Telecom have fallen this week amid analyst warnings of potential credit risk from the Rioforte investment.