The Firm That Nearly Bought Banco Master Wants Its Watchdog Gone

Banking

Brazil’s biggest banking scandal has produced a strange secondary conflict. The company that tried to rescue Banco Master is now fighting the Fictor watchdog appointed to keep an eye on its own reorganisation.

Grupo Fictor announced on 17 November 2025 that it would buy Banco Master for three billion reais, bringing Gulf investors with it. The next day Brazil’s central bank liquidated the lender and the federal police arrested its owner at an airport.

Fictor never completed the purchase. It says the resulting reputational damage triggered a rush of investor withdrawals that drained its liquidity, and in February it filed for judicial reorganisation, the Brazilian equivalent of bankruptcy protection.

What the Fictor watchdog does

When a Brazilian court accepts a reorganisation, it appoints an administrator to supervise the process. In unusual cases it can add a second figure, an independent monitoring agent that lawyers here call by the English word watchdog.

The judge who approved Fictor’s case in April, Fernanda Perez Jacomini, appointed both. Laspro Consultores became administrator; the corporate-investigations firm Kroll became the monitor.

Her reasoning was blunt. Faced with creditor allegations of fraudulent conduct, she wrote, the most appropriate solution was a monitoring agent to conduct rigorous oversight of the debtors’ activities.

The monitor’s remit is to protect the companies’ assets, to follow their activities day by day, and to report to the court any irregularity or risk to creditors. It looks backwards as well as forwards.

Why does the Fictor watchdog face removal?

The group argues the monitor sits outside the ordinary supervisory system and should be appointed only in exceptional circumstances, on demonstrated facts. It points out that a reorganisation already has an administrator, a prosecutor, a creditors’ committee and a judge.

Adding a monitor, in Fictor’s words, creates a duplication of supervisory structures, with overlapping duties and an artificial increase in the cost of the case. Failing outright removal, it asked for the monitor’s scope to be cut, particularly the backward-looking part.

The appeal went to the second reserved chamber of business law at the São Paulo state court. On 3 July Judge Fábio Guidi Tabosa Pessoa declined to suspend the monitor, finding Fictor’s arguments insufficient.

The money the supervision costs

This is where the judge did give Fictor something. He ordered the lower court to detail, within ten days, the criteria used to set the fees of both the administrator and the monitor.

The numbers, as Fictor presented them, are striking. The administrator’s monthly fee began at one hundred thousand reais and now stands at six hundred and forty-five thousand, more than six times the opening figure.

The monitor receives a little over two hundred and twenty-four thousand reais a month, after a first month of some two hundred and ninety thousand. A further sum of nearly six hundred thousand covers the analysis of events preceding the reorganisation.

Fictor totals the first month at slightly over one and a half million reais. Those component figures do not obviously sum to that total, and the group is the source for all of them, so treat the breakdown with care.

The judge was unmoved by the size. The fees were provisional, he noted, and the prosecutor had approved them, in a case that consolidates a large number of companies, involves substantial sums, and demands broad oversight.

His closing point deserves quoting in substance. A company’s crisis does not exempt it from bearing the costs of its own reorganisation.

Who else is fighting whom here?

Nearly everyone. In a separate move, creditors petitioned to remove Laspro as administrator after it argued that money investors had already received should be deducted from their recognised claims.

Laspro’s position rests on a view that the partnership contracts Fictor used to raise money were shams, disguising fixed-income lending that the group had no licence to conduct. A lawyer for more than three hundred creditors called the argument a legal aberration.

The administrator’s own reports are unsparing about what it has found. They describe accounting inconsistencies, evidence of assets being commingled, little or no operating activity at some group companies, and substantial transactions between Fictor entities and related parties.

Its first monthly report listed unsigned balance sheets, missing bank statements, accounts registered to shareholders’ personal tax numbers, and instant-payment transfers to individuals later reclassified as loans to related parties.

Meanwhile the state court has frozen assets of companies and partners left outside the reorganisation, citing what it called selective asset shielding. Fictor’s restructuring plan offers creditors a fund of group assets, or a route carrying a discount of up to ninety-five percent if promised new financing fails to arrive.

Why should a foreign investor care?

Because the Banco Master collapse is being cleaned up through courts rather than regulators, and this is what that process actually looks like. The buyer that would have absorbed the bank is itself insolvent and under judicial surveillance.

The ruling also sets a marker. A Brazilian court has now confirmed that where fraud is credibly alleged, it will layer an outside investigator on top of the ordinary machinery, and make the debtor pay for it.