domingo, 29 de novembro de 2015

CHECK OUT Head of Brazil’s Largest Investment Bank and a Senator Arrested in Petrobras Probe

Head of Brazil’s Largest Investment Bank and a Senator Arrested in Petrobras Probe
Supreme Court ordered arrests of BTG Pactual’s Esteves and Sen. Delcidio do Amaral
ENLARGE 

BTG Pactual CEO André Esteves during a July 2014 interview. Photo: Reuters
By
Marla Dickerson and
Luciana Magalhaes
Updated Nov. 25, 2015 6:02 p.m. ET
SÃO PAULO—The chief executive of Brazil’s largest independent investment bank and a powerful ruling party senator were arrested early Wednesday as part of an investigation into a massive corruption scandal at state-controlled oil company Petróleo Brasileiro SA.
Federal police detained billionaire deal maker André Esteves, chief executive of  BTG Pactual, at his home in Rio de Janeiro. Authorities in Brasília arrested Sen. Delcídio do Amaral, a member of the governing Workers’ Party and the Senate whip, whose help is seen as critical for President Dilma Rousseff to pass unpopular austerity measures to shore up Brazil’s shaky finances.
Prosecutors say the two men were conspiring to pay millions in bribes to a key witness in the Petrobras investigation, then spirit him out of Brazil on a private jet to prevent him from turning state’s evidence that could implicate them in the sprawling graft scheme.
Wednesday’s arrests were stunning even by the standards of Brazil’s biggest-ever corruption probe, which has toppled elites at the highest levels of the nation’s business and government. The developments are yet another blow to Ms. Rousseff, whose popularity has plummeted as Brazil’s economy has deteriorated and her party, known as the PT, has become mired in the scandal.
Previously
“It’s a shock to the political system, especially for the PT, and it’s a shock to the financial system,” said economist Maílson da Nóbrega, Brazil’s former finance minister.
Brazil’s Ibovespa stocks index declined 2.9% to 46866 points, the lowest close in six sessions. Brazil’s currency, the real slumped about 1.4% against the dollar. Traded units of BTG Pactual fell 21% to 24.40 reais ($6.55). Petrobras had the biggest decline in the Ibovespa on Tuesday, with its preferred shares retreating 7.1% to 7.90 reais.
Through his attorney, Mr. Esteves denied wrongdoing. Mr. Amaral’s lawyer said his client is fighting the charges against him. Workers’ Party President Rui Falcão said in a statement that Mr. Amaral’s alleged actions have nothing to with the party. In an emailed statement from the president’s office, Ms. Rousseff said her administration would look for a new Senate whip. Ms. Rousseff hasn’t been implicated in the scandal.
Messrs. Esteves and Amaral were taken into custody on suspicion they were trying to stop a former Petrobras executive, Nestor Cerveró, from cutting a plea bargain with prosecutors and providing testimony that would link the men with the corruption scandal, according to Brazil’s Supreme Court, which authorized the arrests.
Jailed since January while he awaits trial, Mr. Cerveró is accused of taking bribes in exchange for awarding supplier contracts as part of a massive graft ring that operated at Petrobras for more than a decade. Court documents portray the efforts by Messrs. Esteves and Amaral to free Mr. Cerveró from custody.
At a November meeting at an upscale Brasília hotel, Mr. Amaral met with Mr. Cerveró’s son, Bernardo Cerveró and two other men to discuss ways to free Mr. Cerveró from prison and have him flee the country, according to the documents. Bernardo Cerveró, who was cooperating with authorities, used a recording device to the tape the conversations, authorities said.
According to the documents, Mr. Amaral proposed using a legal maneuver to secure Mr. Cerveró’s release from prison while he awaits trial. Mr. Amaral is then alleged to have offered an upfront bribe of 4 million reais (about $1 million) plus 50,000 reais (about $13,000) a month for Mr. Cerveró to keep silent. Mr. Amaral then offered to arrange a private jet on which Mr. Cerveró would flee to Paraguay before traveling on to Spain, where he has citizenship, in order to avoid prosecution.
Supreme Court Justice Teori Zavascki on Wednesday said that Mr. Amaral “is part of a criminal organization,” citing the senator’s alleged participation in “an escape plan” that could jeopardize the corruption probe known as Operation Car Wash.
The court documents didn’t expressly indicate a link between BTG and the investigation.
But Brazilian authorities have been investigating BTG’s $1.5 billion purchase of a 50% stake in the African operation of Petrobras in 2013 following allegations that the price paid the bank may have been too low.
BTG also is a major investor in troubled oil rig supplier Sete Brasil Participações SA, which also was ensnared in the Operation Car Wash investigation. Sete Brasil signed contracts worth roughly $89 billion to provide Petrobras with drillships. As the corruption scandal grew and Petrobras slashed its investment plans, Sete Brasil ran into trouble repaying more than $3.6 billion in loans. Recently Sete has worked to restructure its loans with Brazilian banks. In the first quarter of 2015, BTG wrote off 280 million reais in its stake in the company.
Mr. Esteves’s arrest is a dramatic setback for one the nation’s best-known financial executives. One of Brazil’s richest men, Mr. Esteves, 46, has a net worth estimated at $2.1 billion, according to Forbes.
He started his career at investment bank Pactual in 1989 and became a top trader there before it was bought by Swiss bank UBS in 2006 for around $2.5 billion. When UBS suffered in 2009 during the global financial crisis, Mr. Esteves engineered a repurchase as its controlling shareholder and changed the name to BTG Pactual.
Mr. Esteves quickly developed a reputation for innovative deal making and built BTG into Brazil´s largest independent investment bank, with 245 partners and 3,500 employees. The bank manages about $112 billion and has offices in 20 countries.
—Reed Johnson
and Paulo Trevisani contributed to this article.
Write to Luciana Magalhaes at Luciana.Magalhaes@dowjones.com


==//== 


Senate endorses jailing of Senator Delcídio do Amaral
URL:
  • 26/11/2015 11h30
  • Brasília
          Mariana Jungmann reports from Agência Brasil
 
Senate President Renan Calheiros (left), Senators Romero Jucá (center) and Jorge Viana (right) during the Senate session that decided to keep the government's leader in Senate in jail Wilson Dias/Agência Brasil
The Senate decided to maintain the arrest of Senator Delcídio do Amaral, of the Workers' Party (PT). In an open (nonsecret) floor vote held Wednesday (Nov. 25), the senators held that Amaral, who is the government leader at Senate, should remain jailed, by 59 votes in favor, 13 against and one abstention.
Learn More
Amaral has been in custody at the Federal Police building in Brasília following a unanimous decision of the Supreme Court (STF). The 21st stage of Operation Car Wash has also led to the arrest of the head of Senator Amaral's office, Diogo Ferreira, and the president of BTG Pactual bank, André Esteves.
The ground for the arrest was a recording made by Bernardo, the son of Petrobras's former director and Car Wash Operation convict Nestor Cerveró. In the recording, Senator Amaral offers Cerveró a monthly $13,200 stipend for his family and an escape plan to help him flee the country. Amaral's intention was to prevent Cerveró from striking a plea bargain deal with the Public Prosecutor's Office, which has been investigating the corruption scheme at Brazil's state-run oil company.
Ouster
The Senate endorsement of Senator Delcídio Amaral's inprisonment could be the first step toward his removal from office. Senator Cássio Cunha Lima, leader of PSDB, the largest opposition party, said he expects the Senate presiding officers to report Amaral to the Senate Ethics Committee.
“If they [the presiding officers] fail, then the parties can do it. You don't hold office in Congress from jail. This is a difficult, sad situation, but we're upholding the Constitution, the Republic, and democracy,” Lima said.
After the vote, the President of the Senate, Renan Calheiros, declined to comment on the possibility of seeking Amaral's ouster by reporting him to the Ethics Committee.

Translated by Mayra Borges
Edited by: Augusto Queiroz
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