Exclusive: Brazil central bank weighed ban on former BTG Pactual CEO Esteves

Fri Jan 8, 2016 7:18pm EST
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By Marcela Ayres

BRASILIA (Reuters) - Five years before his arrest in a political corruption scandal, billionaire financier André Esteves was nearly banned from banking in Brazil due to irregular trading, according to a central bank document reviewed by Reuters.

Central bank investigators recommended in October 2010 that Esteves, who founded and ran investment bank Grupo BTG Pactual SA (BBTG11.SA: Quote) until last November, should have been barred from managing financial institutions for six years due to "serious infractions" of banking rules between 2002 and 2004, the document showed. (reut.rs/1RszQku)

The severe punishment under consideration was eventually reduced to fines for Esteves and the bank, but it showed Brazil's most influential dealmaker attracted regulators' scrutiny for more than a decade before his downfall last year.

Esteves declined to discuss the case while BTG Pactual referred inquiries to securities filings at the time.

Central bank director Sidnei Corrêa Marques, who ruled against the proposed ban, told Reuters in an interview he considered the crucial role of the bank and its CEO in the financial system when making his decision.

Esteves was arrested in November and charged with obstructing a corruption probe at state-run oil company Petrobras (PETR4.SA: Quote) by conspiring to help a Petrobras executive who was a potential prosecution witness flee the country.

He denied any wrongdoing but stepped down as chief executive and chairman of BTG Pactual and passed control over Latin America's biggest independent investment bank to seven partners.

After spending three weeks in prison, Esteves was released on house arrest last month pending trial.   Continued...

Brazilian billionaire financier Andre Esteves (R) leaves the Federal police headquarters in Rio de Janeiro, Brazil, December 18, 2015.  REUTERS/Ricardo Moraes