The chief executive of Brazil’s biggest independent investment bank and the leading senator in the governing coalition were arrested on Wednesday on suspicion of obstructing the country’s most sweeping corruption investigation ever. Mr. Esteves is a renowned investment banker, who played a major role in turning things around at Grupco BTG Pactual, Brazil’s largest investment bank.
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BTG Pactual confirmed that Esteves was cooperating with police.
Brazil’s Supreme Court authorized the arrests after prosecutors presented evidence they had interfered with the investigation into kickbacks and bribes paid from contracts with Petroleo Brasileiro SA, as the company is know, a court spokesperson said. It said Esteves would pay BRL50,000 to Cervero’s family for each month under the plan, on top of a BRL4m payment to his lawyer. Units of the bank tumbled 20 percent in early trading on the Sao Paulo stock exchange.
Amaral’s detention came one day after authorities probing the Petrobras scheme arrested Jose Carlos Bumlai, a wealthy rancher reportedly close to Lula.
The arrest order for Esteves allowed him to be held for as many as five days and can be extended.
Mr Esteves is Brazil’s 13th richest man, worth an estimated $2.5bn (£1.7bn), while Mr Amaral is the first sitting legislator to be detained in scandal. Cervero himself was convicted and sentenced to 12 years in prison for corruption and money laundering in the Petrobras scandal.
Esteves, 47, has drawn on powerful connections in politics and global finance to steer BTG Pactual through turbulent times as Brazil’s economy plunged into a sharp recession.
Esteves has been involved in deals with the oil giant over the years, most notably involving Sete Brasil Participacoes SA.
The impact of the investigations could be felt in every business related to BTG Pactual, according to Silvio Campos Neto, an economist at consultancy firm Tendencias. Prosecutors said the former Petrobras director described in his testimony alleged bribes made to use the BR Distribuidora brand at a chain of 120 gas stations Banco BTG Pactual had invested in.
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Esteves in 2006 sold what was then Banco Pactual to UBS Group AG for $2.6 billion. That is the largest exposure among Brazil’s listed traded banks, according to Thomson Reuters data.
