Brazil police arrest CEO of bank BTG Pactual

The arrest of such powerful men stunned the country and once more indicated the scope of what prosecutors say was a massive bribes and faked contracts scheme at the state oil company involving politicians and executives.

Alas, over the past year as Brazil’s economy imploded, BTG had been grappling with fallout from his firms loans and investments in companies linked to the nations biggest-ever corruption scandal. 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. The six-year-old BTG Pactual, which manages about 230 billion reais ($61 billion), tapped less than 5 percent of its about 40 billion reais in cash reserves to cover those redemptions, said the source, who requested anonymity because of the sensitivity of the issue.

According to the Brazilian media, police claimed the politician was detained because he was obstructing the course of an investigation. Congress suspended its sessions as senators met to discuss how to handle the arrest.

Authorisation for both arrests was given by Brazil’s Supreme Court.

The senator referred to Esteves in the conversation “without any justification”. 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. He also criticized the Supreme Court for ignoring the senator’s immunity as an elected official.

LONDON-Moody’s Investors Service on Thursday said it has placed the credit rating of South America’s largest independent investment bank on review for a possible downgrade, following the arrest of the chief executive as part of a wide-ranging corruption probe in Brazil.

On Wednesday, bank shares dipped 21 per cent on the Sao Paulo stock market. She said his defense team is researching the arrest order, which allows for Esteves to be held for as many as five days and can be extended.

Amaral’s detention came one day after authorities arrested Jose Carlos Bumlai, a rancher reportedly close to Lula.

Once a major economic success story, this scandal along with a global downturn in commodity prices has sent Brazil into a deep recession.

His main link to $2 billion Petrobras corruption scandal is his stake at Sete Brasil, a company that operates drill ships for Petrobras.

BTG Pactual and Petroleo Brasileiro were partners in a troubled oil rig supplier, Bloomberg reported. Brazil’s economy is forecast to shrink more than 3 percent in 2015, according to a central bank survey of economists published Monday.