(Bloomberg) -- Grupo BTG Pactual, which bought Swiss bank BSI AG from Assicurazioni Generali SpA last year before reaching an agreement to sell it in February, told the Italian insurer it wants to be indemnified for possible losses tied to BSI’s dealings with a Malaysian fund.
“BTG has notified Generali by letter that it is entitled to indemnity to cover potential liability for BSI’s dealings with a state-run Malaysian fund,” Sao Paulo-based BTG said in an e-mailed statement Tuesday. BTG hasn’t sought a specific amount because the potential costs are unknown, the bank said.
BSI, whose Singapore unit handled accounts for the fund 1Malaysia Development Bhd., known as 1MDB, has said it’s cooperating with international regulators. Authorities from around the world -- including in the U.S., Luxembourg, Switzerland and Singapore -- are trying to determine if some of the billions of dollars that 1MDB raised since 2009 were siphoned into the personal accounts of politically connected individuals.
BSI Chief Executive Officer Stefano Coduri told investors last week that in the context of issues surrounding 1MDB, the bank had exited its Malaysia business. He declined to comment further, saying “there are official investigations.”
An official at Generali declined to comment. Both 1MDB and the Malaysian government have denied any wrongdoing, and the fund has said it’s cooperating with probes.
BTG agreed in February to sell the Swiss private bank to Zurich-based EFG International AG.
EFG CEO Joachim Straehle said Feb. 22 that the bank’s protection on the deal was “sizable.” The firm’s chief financial officer, Giorgio Pradelli, said March 31 on a call with analysts that the bank had strong legal protections for the deal and a “material” amount in escrow.
BTG is selling assets in the wake of a corruption investigation that led to the arrest of founder and former chairman Andre Esteves on Nov. 25. The billionaire, who has denied wrongdoing, was released from prison in December and has since been under house arrest. He’s denied wrongdoing through his attorney.
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