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Brazilian authorities probe 'fraudulent management' at Banco do Nordeste


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Brazilian authorities probe 'fraudulent management' at Banco do Nordeste

Brazilian authorities said Dec. 22 that they have launched an operation that will investigate "indications of fraudulent management" in credit agreements between Banco do Nordeste do Brasil SA and Grupo Petrópolis, a Brazilian brewery company.

The country's Ministry of Transparency and Comptroller General of the Union, together with the Federal Police, opened an operation called Caixa 3, which aims to "obtain evidence on the occurrence of bad faith and deceit by [Banco do Nordeste do Brasil] employees." Authorities said that 72 federal police officers and 10 comptroller auditors are involved in the operation, with 14 search and seizure warrants issued across several Brazilian states.

The investigation stems from irregularities found in Banco do Nordeste's granting of loans totaling 827 million reais to the brewery for the construction of two beverage factories. An audit by the Comptroller General of the Union, however, found irregularities in the evaluation, concession and monitoring of the bank's credit operations.

The operation will also investigate an alleged diversion of resources obtained by the bank to pay election campaign expenses, according to a statement.

As of Dec. 21, US$1 was equivalent to 3.31 Brazilian reais.