The Latin America lender, hit late last year by a corruption scandal, says a probe of the matters has absolved its founder, employees and the bank.

Brazilian bank BTG Pactual, which recently sold the private bank BSI within months of buying it because it needed funds amid a corruption scandal, yesterday said investigations revealed no wrongdoing by senior BTG Pactual executives, including its founder.

Andre Esteves, founder and former chief executive, had to resign his post last November and was arrested amid allegations he was involved in a corruption affair around Petrobas, the state-run energy company. It has been alleged that politicians and others had siphoned money from Petrobas. Esteves denied any wrongdoing at the time.

BTG Pactual late last year completed its purchase of BSI, which is headquartered in Switzerland and has operations in regions such as Asia. However, when Esteves was arrested, the bank had to raise capital quickly and sold BSI, with another Swiss bank, EFG International, agreeing on a deal a few weeks ago. (See here.)

The Brazilian bank yesterday announced that a four-month probe, carried out by a special committee of its board of directors and counsel, “found no basis to conclude that the allegations of misconduct and corruption against Esteves, BTG Pactual or its personnel that were the subject of the investigation are credible, accurate or otherwise supported by reliable evidence.”    

The committee is comprised of independent directors Mark Maletz and Claudio Galeazzi, and non-independent director Huw Jenkins; it was  formed in December 2015 and given a remit to investigate allegations of corruption and illegality following Esteves’s arrest in November 2015.  The committee used the international law firm Quinn Emanuel Urquhart & Sullivan and Brazilian law firm Veirano Advogados.

The committee looked at whether Esteves, the bank or other staff promised to pay bribes to former Petrobras executive Nestor Cerveró not to provide evidence to federal investigators regarding Esteves, participated in a scheme to help Cerveró flee Brazil, or possessed a confidential copy of his plea bargain. It also examined if these persons and/or the bank paid bribes to Congressman Eduardo Cunha in exchange for Cunha’s support of provisional measures favourable to BTG Pactual.
 
The committee also looked at whether the bank, staff or the bank paid bribes to Senator Fernando Collor de Mello and potentially others in connection with an agreement between BR Distribuidora and Derivados do Brasil; participated in suspiciously favourable financial transactions involving José Carlos Bumlai for the concealed purpose of benefitting certain Brazilian politicians with whom he is reported to be close; paid bribes so that BTG Pactual could acquire an interest in the African assets of Petrobras at an artificially low price or receive dividends; were aware of or complicit in corruption at Sete Brasil Participações; and made improper payments to former Brazilian President Lula da Silva.  

The committee said its probe included collection of electronic and hard-copy documents from over 50 BTG Pactual employees by the Brazilian arm of global forensic expert KPMG, a review of approximately 430,000 documents by lawyers from Quinn Emanuel and Veirano, and interviews with almost 30 BTG Pactual senior executives and employees.