SAO PAULO (Reuters) - A Brazilian court has cleared Banco Bradesco SA Chief Executive Officer Luiz Carlos Trabuco of trying to illegally dodge a tax fine of 3 billion reais ($911 million), spurring the biggest jump in shares of the nation’s No. 3 bank in a month.
In a Wednesday securities filing, Bradesco said Brazil’s Federal Regional Court of the 1st Region acquitted Trabuco of charges he participated in a plan to avoid the fine imposed by Brazil’s Tax Revenue Service.
The accusations against Trabuco, one of Brazil’s most influential power brokers, came as a series of corruption scandals at state firms rattled Brazil’s political establishment and undermined President Michel Temer’s administration.
Court officials declined further comment on the ruling.
Preferred shares of the Osasco, Brazil-based lender (BBDC4.SA) added as much as 4.4 percent to 27.28 reais. They were trading 3.9 percent higher at 27.12 reais in Wednesday midafternoon trading.
In May 2016, Trabuco was formally accused over his role in unethical negotiations between Bradesco and government tax auditors to reduce or eliminate fines. The matter is part of a broader probe of fraud at the Finance Ministry’s tax appeals board that was unveiled in March 2015.
The probe, known in Brazil as “Operation Zealots,” has alleged that some of Brazil’s largest companies bribed members of the CARF - a Finance Ministry body that hears appeals on tax disputes - in return for favorable rulings.
Trabuco, 65, agreed last year to stay longer at the helm of Bradesco to groom a successor.
Since taking over in late 2008, Trabuco has presided over Bradesco’s rapid growth in consumer financial services and the $5.2 billion purchase of HSBC Holdings Plc’s (HSBA.L) Brazilian unit in August 2015, its largest acquisition ever.
The cases under investigation came before the CARF board between 2005 and 2013. The “Zealots” probe worsened the political climate in Brazil as a larger corruption scandal, “Operation Car Wash,” helped drive the country into its worst recession on record.
The tax probe ensnared other prominent executives including André Gerdau Johannpeter, the scion and CEO of steelmaker Gerdau SA (GGBR4.SA) and Joseph Safra, owner of Banco Safra SA. According to Forbes Magazine, Safra is the world’s richest banker.
In December, Brazilian judges dropped prosecution against Safra in connection with the scheme.
Editing by Jeffrey Benkoe and Diane Craft