RIO DE JANEIRO (AP) - When IT specialist Andre Esteves decided to leave Swiss bank UBS in 2008 to refound bank Pactual, he added BTG to the company's name to symbolize that he was "back to the game." Later, as a darling of the financial markets, he jokingly said that the acronym actually meant "better than Goldman" Sachs.
RIO DE JANEIRO (AP) — When IT specialist Andre Esteves decided to leave Swiss bank UBS in 2008 to refound bank Pactual, he added BTG to the company's name to symbolize that he was "back to the game." Later, as a darling of the financial markets, he jokingly said that the acronym actually meant "better than Goldman" Sachs.
On Thursday, though, Esteves, one of the wealthiest men in the country, he completed his first day in jail, accused of obstructing a probe into corruption at the state oil company, Petrobras.
Esteves, who denies all the accusations, was arrested at his home in Rio de Janeiro, sending BTG Pactual shares tumbling.
On Wednesday, bank shares dipped 21 percent on the Sao Paulo stock market. On Thursday, rating agency Moody's said it was placing the bank's ratings on review for downgrade, which triggered another session of losses for BTG.
The impact of the investigations could be felt in every business related to BTG Pactual, according to Silvio Campos Neto, an economist at consultancy firm Tendencias.
"We don't know yet how exposed they are. But the main risk is a loss of confidence leading to cash flowing out. Then it could affect others that are related," he told The Associated Press. "So far the risk seems to be under control. But the market is vigilant."
In July last year, BTG bought Swiss bank BSI for $ 1.68 billion. Esteves, 47, was recently involved in a pending operation to merge dominant cellphone carriers Oi and TIM in Brazil. BTG has shares in construction companies, online media and many other sectors.
The bank tried to calm investors with the appointment of Persio Arida, chairman of the bank's asset management unit and former Central Bank governor, as interim CEO.
But to many who do business in Brazil, BTG Pactual is Andre Esteves. Until Wednesday, Forbes measured his net worth at $2.3 billion. Known as an aggressive businessman who likes full control, he made his career as an investment banker. He also has been known for contacts with former President Luiz Inacio Lula da Silva, opposition leader Aecio Neves and Rio Mayor Eduardo Paes.
His main link to $2 billion Petrobras corruption scandal is his stake at Sete Brasil, a company that operates drill ships for Petrobras. Congress Speaker Eduardo Cunha, another friend of Esteves', is accused of corruption in a drill ship scheme.
As of December 2014, Brazil's central bank rated BTG as the eighth largest financial institution in the country in total assets. The bank says it has offices in 20 countries.