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, bringing Gulf investors with it and injecting R$3 billion in capital. The next day Brazil’s central bank liquidated the lender, and federal police arrested its owner at an airport.

Fictor never completed the purchase. It says the reputational damage triggered a rush of investor withdrawals that drained its cash, and in February it filed for judicial reorganisation, the Brazilian version 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, and the corporate-investigations firm Kroll became the monitor. Our reporting has shown that Kroll’s role as watchdog extends beyond routine oversight, as the firm is tasked with investigating the same kind of structural irregularities that the Banco Master scandal exposed across Brazil’s financial system.

Her reasoning was blunt. Faced with creditor claims of fraud, she wrote, the best solution was a monitoring agent to keep close watch over the debtors’ activities.

The monitor must protect the companies’ assets and follow their activities day by day. It also reports to the court any irregularity or risk to creditors, looking backwards as well as forwards.

Why does the Fictor watchdog face removal?

The group argues the monitor sits outside the normal supervisory system. It should be used only in exceptional cases, on proven facts, and 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 higher costs. Short of full removal, it asked for the monitor’s scope to be cut, especially 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 before the reorganisation.

Fictor totals the first month at slightly over one and a half million reais. Those parts do not obviously add up 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 joins many companies, involves large sums, and needs broad oversight.

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

Who else is fighting whom here?

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

Laspro says the partnership contracts Fictor used to raise money were shams. It argues they disguised fixed-income lending that the group had no licence to conduct, and 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 mixed assets, little or no operating activity at some group companies, and large deals 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 plan offers creditors a fund of group assets, or a route with 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 really looks like. The buyer that would have absorbed the bank is itself insolvent and under court watch. Critics say the heavy reliance on judicial reorganization, rather than regulatory intervention, echoes the pattern our reporting has documented in the Banco Master case, where enforcement gaps and judicial overreach have raised concerns among foreign capital markets participants.

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

Background: Moraes Family Firm Warned of Corruption Risk in Master Advice.

More: Brazil news in English, every day from The Rio Times.

Frequently Asked Questions

Why does Grupo Fictor have both an administrator and a separate watchdog overseeing its bankruptcy process?

The judge who approved Fictor's reorganisation appointed both because creditors had alleged fraud, making independent oversight necessary. The administrator, Laspro Consultores, runs the daily process, while Kroll acts as a watchdog to monitor activities, protect assets, and report any irregularities to the court.

How much does the supervision of Fictor's reorganisation cost each month?

By Fictor's own filings, the administrator Laspro now receives R$645,000 (about $126,000) a month, up from R$100,000, while the watchdog Kroll receives R$224,340 (about $44,000). A São Paulo appeals judge ordered the lower court to explain within ten days how those fees were calculated.

What happened to Fictor's plan to buy Banco Master?

Fictor announced on 17 November 2025 that it would buy Banco Master for three billion reais. The next day Brazil's central bank liquidated the bank and police arrested its owner at an airport, so the deal never closed. Fictor says the reputational damage drove investors to pull their money, draining its cash and forcing it to file for bankruptcy protection in February.

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