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Report: Banco BMG may be held responsible for Banco Schahin's liabilities

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Report: Banco BMG may be held responsible for Banco Schahin's liabilities

Under a pending court ruling, Banco BMG S.A. may be held responsible for the liabilities of Banco Schahin,which it acquired in 2011, O Estado de S.Paulo reported April 9.

In total, five former clients of Banco Schahin are seeking $150million claiming they are owed that amount from securities investments made by thebank to the offshore firm S&S Finance.

A ruling was recently issued in favor of one of the clients bya judge who considered that S&S Finance's liabilities correspond to Schahinand, by succession, to BMG. However, BMG said that it will appeal that decision.

Meanwhile, Banco Schahin reportedly said in a statement that"the debt and lawsuits related to the group are being treated under the sphereof its financial restructuring, whose reliability was recently recognized with theapproval of its extrajudicial liquidation plan."

S&S Finance has been named in Brazil's ongoing Lava Jato corruption investigation as a firmthat was allegedly used to pay bribes that involved state-run oil company Petrobras,the publication noted.