Investigators searched the Lisbon offices of Portugal Telecom on Tuesday as part of a probe into a controversial loan it made to a holding company of failed banking group Banco Espirito Santo.
The investigation concerns "suspicions of aggravated fraud" connected with Portugal Telecom's "financial investments", prosecutors said in a statement.
"Portugal Telecom will cooperate fully with the authorities," a spokeswoman for the group's PT SGPS holding company told AFP.
Portugal Telecom in April last year loaned 897 million euros ($1.2 billion) to Rioforte, one of the BES holding companies.
Rioforte failed to meet repayment of the debt in July and the bank had to be rescued in August by the government.
Tax inspectors and officials from the market supervisor also participated in the operation.
At the same time as the probe of Portgual Telecom buildings, investigators also searched the offices of auditing group PricewaterhouseCoopers (PwC), officials said.
According to the weekly Expresso, a PwC audit of the Portugal Telecom loan to Espirito Santo is said to have expressed serious misgivings about the company's management by former directors.
The head of the market regulator, Carlos Tavares, said in July that the issuing of the loan may have included "possible criminal behaviour".
The raid comes days before PT SGPS is expected to respond formally next week to the sale of Portugal Telecom's Portuguese assets to Altice, the parent company of French telecoms firm Numericable-SFR.
The holding company has a veto over the transaction, which came about after the merger between Portugal Telecom and Brazilian operator Oi that began in 2013 soured.
Oi forced its Portuguese partner to sign a new merger agreement after the collapse of BES due to the loan, cutting Portugal Telecom's share in the new combined company to around a quarter from the 38 percent originally agreed.
Oi kept Portugal Telecom's assets in Brazil, but agreed to sell off those in Portugal to Altice for 7.4 billion euros in December.
Portugal Telecom's chief executive, as well as that of Oi who was a former head of Portugal Telecom, both resigned over the BES affair.
Portugal Telecom share prices have shed more than 70% of their value since media reports revealed the Rioforte loan last June, with some investors losing as much as 400,000 euros ($476,00), stock market observers said.
Portugal Telecom stock price declined a further six percent by Tuesday's closing to .81 euros ($0.97).