Brazil watchdog opens probe on BTG Pactual on Esteves exit

jueves 3 de diciembre de 2015 14:33 GYT

SAO PAULO Dec 3 (Reuters) - Brazil's securities industry watchdog CVM has opened a probe on the process that led to the exit of André Esteves from the holding company that controls Grupo BTG Pactual SA, and whether it configured a change of control at the embattled Brazilian investment bank.

The Rio de Janeiro-based watchdog, known as CVM, will focus on determining whether the transaction by which Esteves traded his voting stock for non-voting stock in the BTG Pactual Holding vehicle automatically triggered a tender to buy out minority shareholders, a spokeswoman said on Thursday.

Founding partners of BTG Pactual took control of the bank from Esteves on Wednesday, in a bid to distance the firm from the most sweeping corruption investigation in Brazil's history. Esteves was arrested on Nov. 25, on suspicion he tried to silence a witness that could potentially incriminate him in a corruption probe known as "Operation Car Wash."

Chairman Persio Arida told Reuters that the transaction did not configure a change of control in the bank because the share swap that removed Esteves took place at the holding company that owns a majority of BTG Pactual. Until recently Esteves had almost 29 percent of the bank's capital, and had a so-called golden share that gave him veto power over strategic decisions.

The deal involved no cash disbursements, a source briefed on the matter told Reuters on Wednesday. Esteves will no longer take part in decision-making and will become a mere dividend-earner, Arida said.

Under Brazil's securities law, transactions in which an acquirer wins control of the target company must be followed by a tender offer for minority shareholders. (Reporting by Aluísio Alves; Writing by Guillermo Parra-Bernal; Editing by Bernard Orr)