Bradesco stock slumps as CEO Trabuco accused in Brazil tax probe

Thomson ReutersA woman walks past a Banco Bradesco branch in downtown Rio de Janeiro

By Guillermo Parra-Bernal and Tatiana Bautzer

SAO PAULO (Reuters) – Shares in Banco Bradesco SA, Brazil’s No. 2 private-sector bank, posted their biggest intraday drop in almost seven months on Tuesday after the federal police accused Chief Executive Officer Luiz Carlos Trabuco and two senior executives of wrongdoing in a sweeping tax probe.

The office of Brazil’s Prosecutor-General told Reuters that a report from the federal police requesting charges against Trabuco and the executives was received earlier in the day. Bradesco, based in Osasco city, had no immediate comment.

According to a source briefed on the matter, the other two Bradesco executives named in the report were Chief Financial Officer Luiz Carlos Angelotti and Domingos de Abreu, a senior vice president. The police had been investigating alleged negotiations between the executives and tax auditors over the elimination of a 3 billion-real ($828 million) fine that the country’s Tax Revenue Service had imposed on Bradesco.

Nonvoting shares , Bradesco’s most widely traded class of stock, fell as much as 7.3 percent to 22.23 reais, the biggest intraday decline since Nov. 11. Voting shares fell 3.4 percent, while Bradesco’s New York-traded stock tumbled 5.5 percent to $6.275 per American depositary receipt.

(Additional reporting by Eduardo Simões in São Paulo and Marcela Ayres in Brasilia; Editing by Cynthia Osterman)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.