Brazilian financier Andre Esteves on Sunday resigned as chief executive and chairman of Grupo BTG Pactual SA after he was jailed as part of a corruption probe rapidly ensnaring Latin America’s largest independent investment bank.
Prosecutors are preparing to file charges against the billionaire dealmaker, who they suspect, along with a Brazilian senator, of trying to obstruct a long-running investigation into graft at state-run oil company Petroleo Brasileiro SA, or Petrobras.
Esteves, through his lawyer, has denied the allegations.
In a fresh twist to the near-two-year-long probe, Brazilian newspapers said police found documents allegedly linking BTG Pactual to the payment of bribes to ruling coalition lawmakers.
It is the first time the bank has been directly implicated in the bribery scandal and the newspapers said prosecutors used the documents to persuade the country’s Supreme Court to extend Esteves’ detention.
The documents contained information alleging that BTG Pactual paid 45 million Brazilian real (US$11.7 million) to Brazilian President of the Chamber of Deputies Eduardo Cunha in exchange for the passage of legislation favoring the bank, the newspapers said.
BTG Pactual on Sunday denied the payments in a statement and pledged to cooperate with authorities.
A source familiar with the matter said the revelations and the extension of Esteves’ detention convinced him and his business partners that he had to resign.
Esteves still owns 28.8 percent of the bank and his stake includes a so-called golden share which gives him veto rights on any board decisions.
BTG Pactual named two founding partners, Roberto Saloutti and Marcelo Kalim, currently the bank’s chief operating officer and chief financial officer, respectively, as co-chief executive officers.
Persio Arida, who was named acting chief after Esteves’ arrest on Wednesday, is now chairman, with Huw Jenkins, head of the bank’s international arm, becoming vice chairman.
BTG Pactual has about 70 partners, including Esteves, who control a combined 80 percent of the bank’s capital, according to bank data. The new co-chiefs each have about 5.5 percent.
The main partners, a group of seven executives including Kalim, Saloutti and Jenkins with whom Esteves founded the bank in 2008, are considering buying their former leader out, the source said, adding that Esteves’ stake is currently valued at 6.05 billion real.
While Esteves on Sunday sat in prison, north of Rio de Janeiro, the bank’s main partners gathered at the bank’s headquarters in Sao Paulo’s Faria Lima to finalize the sale of a 12 percent stake in Rede D’Or Sao Luiz SA, Brazil’s largest hospital chain, to Singapore’s sovereign wealth fund GIC Pte Ltd.
The stake is to be sold for almost 2.5 billion real, a source directly involved in the deal said.
The bank had been negotiating the Rede D’Or deal since August, but Esteves’ arrest sped up talks, two other sources said.
GIC paid 3.3 billion real for a 16 percent stake of Rede D’Or in May.
The new deal could help shore up BTG Pactual’s balance sheet after Esteves’ arrest prompted clients to pull over US$1 billion in investments held at the bank’s asset management division.
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