Updated 01:16 PM EDT, Wed, Sep 22, 2021

Brazil News: Petrobras Scandal Triggers Brazil Billionaire Andre Esteves’ Arrest

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Andre Esteves, one of Brazil's richest businessmen, was arrested at his Rio de Janeiro home. Documents were also seized from both his home and the bank he heads in Sao Paulo.

Esteves is the controlling shareholder of BTG Pactual. The banking billionaire was arrested Wednesday together with leader of the governing Workers Party in the Senate, Delcidio Amaral, a BBC report says.

Both men have been arrested in connection to Operation Lava Jato, an ongoing investigation in corruption charges involving state-run oil giant Petrobras. Following the banking mogul's arrest, Grupo BTG Pactual lost more than a fifth of its market share value, reports Bloomberg.

Grupo BTG Pactual is considered to be "the darling of the independent banking world." The largest independent investment bank in Latin America also saw its financing costs double following Esteves' arrest on Wednesday.

Both men were detained after supposedly trying to interfere in testimony related to the ongoing investigation of the oil giant, Petroleo Brasileiro SA, a court document says. To note, Amaral is the highest-ranking politician who was arrested in the corruption scandal.

The banking billionaire said that he was not involved in the Petrobras scandal, denying allegations through his attorney. BTG Pactual, in the meantime, had elected board member Persio Arida as interim chief executive. Reportedly, its board has approved a plan to buy back as many as 23 million units over the next 18 months.

The high-ranking arrests came after a phase of corruption scandals have left Brazil's economy in a stagnant state. President Dilma Rousseff continues to lose her popularity among many Brazilians, who are calling for a political coup.

While Brazil's stocks and currency have seen some stability in the past few weeks, Wednesday's events have posted what was to be the worst drop among major markets. Many financial analysts are concerned that the Petrobras scandal will only bring about a long recession.

In the past, Esteves was involved in dealings with Petrobras, one of which is Sete Brasil. BTG had reportedly teamed up with Petrobras, as well as partners in 2010, to create the rig-supplier. The former operating chief admitted to crimes of corruption.

Over a 100 people have currently been arrested in the investigation that spanned two years. Among those arrested include politicians, former top executives at Petrobras, as well as some of Brazil's biggest construction firms.

Esteves is Brazil's 13th richest man, with worth estimated at $2.5bn (£1.7bn), BBC notes.

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