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Brazil police raid investment bank BTG Pactual, shares sink over 11%

Key Points
  • Brazil's federal police on Friday raided the headquarters of Latin America's largest independent investment bank, Banco BTG Pactual SA, and the addresses of its founder Andre Esteves, federal prosecutors said in a statement.
  • Maria das Gracas Foster, former chief executive of state-controlled oil company Petroleo Brasileiro SA, was also a target, the statement said. The raids were related to the sale of stakes in African oilfields to BTG Pactual, it said.
  • Shares of BTG Pactual sank more than 11% in early Sao Paulo trading to 59.55 reais.
Andre Esteves, CEO Brazilian BTG Pactual bank is pictured during an interview in Sao Paulo July 22, 2014.
Nacho Doce | Reuters

Brazil's federal police on Friday raided the headquarters of Latin America's largest independent investment bank, Banco BTG Pactual SA, and the addresses of its founder Andre Esteves, federal prosecutors said in a statement.

Maria das Gracas Foster, former chief executive of state-controlled oil company Petroleo Brasileiro SA, was also a target, the statement said. The raids were related to the sale of stakes in African oilfields to BTG Pactual, it said.

BTG Pactual confirmed in a securities filing its headquarters in Sao Paulo and Rio de Janeiro were raided by federal police and said it was operating normally.

Shares of BTG Pactual sank more than 11% in early Sao Paulo trading to 59.55 reais.

The bank said it was cooperating with authorities and the raids were related to a plea deal signed by former minister, Antonio Palocci. It said the facts were already investigated by a special independent committee led by lawfirm Quinn Emanuel Urqhart & Sullivan LLP, which found no evidence of unlawful conduct.

Prosecutors are investigating whether Petrobras, as the state-run company is known, sold stakes in Nigerian oilfields to BTG in 2013 for a value lower than initial assessments by other financial institutions.

"In the beginning of the sale process, the assets were valued between $5.6 billion and $8.4 billion. But in the end, BTG Pactual paid $1.5 billion for a 50% stake," the statement said. It also mentioned potential ribes related to the acquisition of oil rigs.

Petrobras sold its 50% stake in Petrobras Oil and Gas BV, known as Petroafrica, to Vitol SA last year. BTG kept its stake.

BTG Pactual founder Andre Esteves last month asked the central bank to allow him to take back a key stake in the bank's controlling partnership after he was acquitted on different corruption charges.

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