BTG Billionaire Esteves Sued in Hong Kong by Ex-Employee

Andre Esteves, the billionaire founder of Brazil’s BTG Pactual, was sued by a former employee in Hong Kong who claims he was promised a partnership and stock for securing investors before the bank’s initial share sale.

Zeljko Ivic alleged that Banco BTG Pactual SA, Chairman and Chief Executive Officer Esteves and Huw Jenkins, a managing partner, made fraudulent misrepresentations to get him to sign agreements with the investment bank, according to a lawsuit filed with the Hong Kong High Court.

BTG Pactual raised as much as 3.66 billion reais ($1.66 billion) in its 2012 initial public offering. The sale followed a 2010 agreement to sell a stake to a group including China Investment Corp., GIC Pte. and the Rothschild and Agnelli families. Esteves, 45, is worth $4.2 billion according to the Bloomberg Billionaires Index, mostly due to his 22 percent stake in BTG Pactual. (BBTG11)

Jenkins and Hong Kong-based BTG Pactual Asia Ltd., which has also been sued, will vigorously defend the claims, “which they believe to be baseless and without merit,” according to their lawyer Randall Arthur.

BTG Pactual doesn’t comment on matters under litigation, the Sao Paulo-based bank said in an e-mail response to queries. Shares of the company fell 0.7 percent to 32.22 reais at 10:41 a.m. in Sao Paulo.

Photographer: Jin Lee/Bloomberg

Andre Esteves, chief executive officer of Banco BTG Pactual SA. Close

Andre Esteves, chief executive officer of Banco BTG Pactual SA.

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Photographer: Jin Lee/Bloomberg

Andre Esteves, chief executive officer of Banco BTG Pactual SA.

Ivic is seeking more than $20 million as damages for the value of the shares and partnership promised, as well as unpaid bonuses, his lawyer Robert Tibbo said.

Overseas Defendants

“My client was instrumental in the nine-member consortium agreement being signed up for,” he said.

There are two actions by Ivic over the matter. The first against BTG Pactual Asia began in the Labour Tribunal and was transferred to the High Court because it involved alleged fraud and because of the complexity of the case. Ivic filed a separate suit directly in the High Court in order to serve the overseas defendants.

Tibbo argued at a May 12 hearing that Ivic should be allowed time to serve Esteves and Banco BTG Pactual in Brazil, so that the two cases can be consolidated, saving the court time and costs. Herbert Au-Yeung, the judge for the hearing, agreed.

Jenkins, based in London, was served on a visit to Hong Kong, the court heard.

Ivic, 46, declined to comment. He started work for BTG Pactual in September 2010 and was licensed as a representative of the bank by Hong Kong’s Securities and Futures Commission from September 2011 to October 2013.

ABN, UBS

He previously worked for Dubai investment bank Millennium Finance Corp. (DIB) and ABN Amro, according to his LinkedIn profile. ABN said in 2001 when it hired him from BNP Paribas Peregrine in Hong Kong that he had also worked for Jardine Fleming and was “a seasoned telecom banker with prime responsibility for client relationships as well as execution and structuring of transactions in the region.”

Jenkins, 56, began his banking career with HSBC Holdings Plc in Hong Kong in 1981, moving to Hill Samuel and Barclays de Zoete Wedd and then SBC Warburg where he was head of Asian equities. From 2000 to 2007 he was at UBS AG, rising to head the investment-banking unit of the Swiss bank.

Esteves sold what was then Banco Pactual to the Zurich-based bank in 2006 for $2.6 billion. He moved to London to be global head of fixed-income sales and trading for UBS the following year and offered to buy a controlling stake in the Swiss bank during the 2008 financial crisis.

Bid Rejected

UBS rejected the bid and Esteves quit to form BTG, which he has joked stands for Back to the Game or Better than Goldman. In 2009, UBS agreed to sell to him and some of his former partners Pactual for $2.5 billion.

The bank, now known as Grupo BTG Pactual, on May 7 posted a 36 percent increase in first-quarter profit, beating analysts’ estimates. Its shares have risen 18.7 percent this year, compared with a 5.6 percent advance in the benchmark Ibovespa Index.

The cases are Ivic Zeljko v. Banco BTG Pactual SA (BPAC3) and others, HCA248/2014 and Ivic Zeljko v. BTG Pactual Asia Ltd., HCA2463/2013, Hong Kong Court of First Instance.

To contact the reporter on this story: Douglas Wong in Hong Kong at dwong19@bloomberg.net

To contact the editors responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net Andrea Tan, Matthew Brooker

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