Banco BTG Pactual SA's shares dropped sharply for a second trading day following a report claiming that the Brazilian bank had a department dedicated to facilitating money laundering.
Shares of the bank fell by as much as 30% during trading on Monday, Aug. 26, though ended the day down by about 18.5% at 46.46 reais. The decline came as a report from local website O Antagonista cited an unnamed source as saying the bank had a "structured operations department" specifically meant to handle money laundering. In a statement, BTG Pactual called the report "apocryphal" and said it "strongly denies any irregularities related to the alleged embezzlements, tax evasion or money laundering."
The report came after federal police on Friday, Aug. 23, raided both the bank's headquarters and the residences of founder and former CEO Andre Esteves as part of the long-running Lava Jato corruption investigation. Investigators are probing ownership stakes that state oil company Petrobras sold to BTG Pactual in 2013 at prices that were lower than preliminary estimates.
Shares of BTG Pactual dropped by roughly 15% on Aug. 23 trading following the raids. Combined with Monday's losses, the company stock was down around 31%, and its market value lost 18.2 billion reais over the two trading days.
Speaking at an impromptu conference call, BTG Pactual CEO Roberto Sallouti assured there was "no cause for concern" over the development, adding "we're very calm that over time all will be clarified," according to an Aug. 27 Bloomberg News report.
Shares partly recovered in early trading on Aug. 27, rising by about 6.5% to 49.50 reais as of 11:07 a.m. in São Paulo.
The Lava Jato investigation's scope includes bribes paid to executives at oil company Petrobras in exchange for public contracts. Esteves was arrested in 2015 related to the investigation, though he was later cleared of charges.
As of Aug. 26, US$1 was equivalent to 4.15 Brazilian reais.
