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UPDATE 1-Brazil suspects Esteves paid bribes in Africa deal, paper says
December 17, 2015 / 2:42 PM / 2 years ago

UPDATE 1-Brazil suspects Esteves paid bribes in Africa deal, paper says

(Recasts to add details on Thursday’s court meeting)

BRASILIA, Dec 17 (Reuters) - Brazilian prosecutors suspect jailed financier André Esteves paid bribes to buy Africa-based assets from state oil company Petroleo Brasileiro SA, a newspaper reported, as the country’s top court mulls whether to release the billionaire banker on Thursday.

O Estado de S. Paulo said Prosecutor-General Rodrigo Janot used evidence from a plea bargain by lobbyist Fernando Soares, who linked Esteves to the payment of bribes at the state company known as Petrobras. Esteves has been in pre-trial detention at a prison in Rio de Janeiro since his arrest last month.

Estado, without saying how it obtained the information, said Janot believes Esteves and Grupo BTG Pactual SA, the bank he helped found six years ago, profited from the Africa deal and other transactions.

The lobbyist’s testimony concerns Petrobras’s sale of a 50 percent stake in a unit holding African assets to BTG Pactual for $1.5 billion in 2013.

The unit, renamed PetroAfrica, includes Petrobras’ operations in Angola, Benin, Gabon, Namibia, Nigeria and Tanzania. It was designed as as a joint venture to explore and produce oil and gas in the region.

Esteves’ lawyer, Antonio Carlos de Almeida Castro, denied the allegations. Petrobras and the Prosecutor-General’s office did not immediately comment.

BTG Pactual has said that the transaction was done transparently and pledged to cooperate with authorities.

In May, officials opened a probe into PetroAfrica after opposition lawmakers said the price paid by BTG Pactual was too low. BTG Pactual presented the highest bid in a dozen proposals, with the price vetted by Petrobras’ adviser Standard Chartered, according to bank and Petrobras documents.

Esteves relinquished his executive duties at BTG Pactual and exited the holding that controls the bank days after his arrest.

The Estado report came as justices from Brazil’s Supreme Court were due to rule on a petition by Esteves’ lawyers to release the banker, on the grounds that prosecutors have failed to produce sufficient evidence.

Esteves and Senator Delcídio do Amaral, the former leader of Brazil’s governing coalition in the upper house, were arrested on Nov. 25 on suspicion of obstructing “Operation Car Wash,” a sweeping probe into corruption at Petrobras.

A Supreme Court justice authorized the arrests after prosecutors presented a recording of Amaral trying to bribe former Petrobras executive Nestor Cerveró to refuse a plea bargain that could implicate the senator, Esteves and other politicians.

Janot said evidence showed Esteves “was part, consciously and willingly, of a scheme that created a cartel” through dealings with Petrobras, Valor Econômico said on Wednesday.

Prosecutors alleged Amaral conspired to help Cerveró flee authorities. They said the senator offered a monthly stipend to the former executive’s family, financed by Esteves, Estado reported.

Documents produced by Amaral’s defense, obtained by Reuters, said the senator’s mention of Esteves in taped conversations was a bluff to give Cervero’s family the impression they would be taken care of.

BTG Pactual, Latin America’s largest independent investment bank, is shedding assets and halting new loans after Esteves’ arrest triggered large client fund withdrawals and hampered access to funding. So far, the partners who took over from Esteves have managed to bulk up cash and avert a rapid downsizing of the bank, government sources told Reuters last week.

The bank’s São Paulo-traded units, a blend of voting and non-voting shares in BTG Pactual’s banking and private-equity divisions, gained as much as 5.9 percent on Thursday, to 15.35 reais - the highest in more than a week. (Reporting by Guillermo Parra-Bernal; Additional reporting by Silvio Cascione in Brasilia and Tatiana Bautzer in São Paulo; Editing by Gareth Jones and Frances Kerry)

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