Brazilian police target lender Digimais in probe of alleged fraud, source says

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Brazil's federal police said they were carrying out search-and-seizure warrants on Tuesday issued by a federal court in Sao Paulo, which a source close to the investigation told Reuters targeted lender Digimais.In a statement that did not name suspects, federal police said they had launched an operation based on reports from Brazil’s central bank indicating that those under investigation allegedly "manipulated accounting statements and regulatory records to conceal the institution's true financial situation, appear solvent to regulatory bodies, and enable supposedly irregular operations."Police said the operation was carrying out nine search-and-seizure warrants, which also authorized the freezing and seizure of assets and funds of up to 670 million reais ($130.25 million).Digimais did not immediately respond to requests for comment.In April, investment bank BTG Pactual (BPAC.SA), confirmed it had signed an agreement to acquire Digimais, which belongs to prominent evangelical bishop Edir Macedo.Reuters reported on the occasion, citing a person familiar with the discussions, that the agreement complied with new regulations introduced last year for institutions associated with Brazil's private credit guarantee fund FGC, following the collapse of lender Banco Master, which was liquidated in November.However, a person familiar with the matter told Reuters that certain conditions precedent for completing the acquisition have not been met, raising the possibility that BTG may decide not to proceed with the deal.BTG did not immediately respond to requests for comment.Digimais is a credit-focused bank with a strong emphasis on automobile financing, according to a corporate presentation. Last year, a former partner of Banco Master had announced the acquisition of Digimais, but the deal was never concluded.($1 = 5.1438 reais)

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