The Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) scandal has impacted the shares of BTG Pactual. The current market value of the banking firm is $6.1 billion and the revenue on bonds that were due for maturity in 2020, also reached 12%. Reportedly, Andre Esteves who is the CEO of BTG Pactual and Senator Delcidio do Amaral were arrested for being part of the Petrobras $2billion scandal.
The current arrest followed a statement of former Petrobras head Nestor Cervero, who was arrested in January 2015. Esteves tried persuading Cervero to keep his name out of the case and this was found by the authorities and landed the former in trouble.
Dilma Rousseff is Former Chairperson of Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR)
Another major development in the case is the alleged involvement of Brazil’s President Dilma Rousseff as he was the chairperson of Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) at the time of the scandal and this may tumble the government. Even as Rousseff’s government has contributed immensely to the economy of the country, the fresh claims can help opposition demand the president’s impeachment.
The involvement of Rousseff is suspected because of his close association with the Senator. Even as billionaire Esteves has denied any involvement in a statement through his lawyer, the stakes are high on this one. BTG Pactual’s 23 million shares buyback plan has also been impacted by the arrest of its CEO. Persio Arida, a board member has been made the interim CEO of the company and buyback of the shares in next 18 months was submitted in a regulatory filing.
Economy to Tumble?
The country’s economy to stands to be impacted by the oil scandal as major stocks and currency that have just stabilized will again tumble. The market has seen its worst dip since 2012 and the fears of recession are looming on the country owning to the political imbalance that may occur if the president’s involvement in the scandal is confirmed.
Due to the worst scandal of the decade, the country’s political and economic stability has been put in danger and the opposition attack may incur a huge blow on the country, according to market analysts. It remains to be seen how the oil company scandal will turn out in coming months.