Andre Esteves, the founder of Grupo BTG Pactual, is no longer the controlling shareholder of the largest independent investment bank in Latin America following his arrest in connection with a corruption investigation.

Esteves relinquished his financial control in BTG Pactual to his top seven partners through a share swap, according to a regulatory filing.

A person familiar with the share swap told Bloomberg that the transaction between Esteves and his top seven partners was triggered using the bylaws of the investment bank. The person said the top seven partners took control of BTG Pactual by granting Esteves with non-voting stock in exchange for his voting shares. The seven partners hold equal numbers of voting shares.

The top seven partners who now control BTG Pactual include co-chief executives Marcelo Kalim and Roberto Sallouti, executive chairman Persio Arida Antonio Carlos Canto Porto Filho, James Marcos de Oliveira, Renato Monteiro dos Santos, and Guilherme da Costa Paes.

The filing indicated that the top seven partners will exercise their control through a holding company, which they established. The shareholding control change is subject to the approval of the Central Bank of Brazil.

Bernardo Rodarte of Sita Corretora, told Bloomberg, “Isolating Esteves won’t be enough to keep the problems away. A bank is its reputation. There is no way around it and this crisis has definitely damaged it.”

BTG Pactual shares
Chart via S&P Capital IQ

Allegations against Esteves

Authorities arrested Esteves on November 25. He was accused of obstruction of justice in connection with the biggest corruption investigation in Brazil known as Carwash. He allegedly offered to help a witness in the Petroleo Brasileiro corruption investigation to exit the country. Esteves denied the allegations

Federal prosecutors also found evidence indicating that BTG Pactual paid 45 million reais or almost $12 million to Eduardo Cunha, the Speaker of the lower house of Brazil’s Congress.

The allegations prompted the country’s High Court to extend Esteves’ stay in jail for an indefinite period on Sunday. The decision led him to resign as Chairman and CEO of BTG Pactual. The investment bank denied the latest allegation against it.

Moody’s Investor Service cut ratings on BTG Pactual

Moody’s Investors Service decided to cut its rating on BTG Pactual’s banking unit to Ba2 from Baa3. The rating agency said that junk rating is still under review for further downgrades citing concerns that the investment bank will struggle to keep cash on hand and maintain its franchise.

BTG Pascual sold its stake in Rede D’Or Sao Luiz SA, the biggest hospital chain in Brazil, for 2.38 billion reais ($618 million).