Banco Santander's (SAN) senior executive, Alexsandro Broedel Lopes, is being investigated by Brazil's central bank over fraud allegations made by his former employer, Itau Unibanco, the Financial Times reported Friday, citing a document.

Broedel, who is Itau's former finance chief, was accused of siphoning funds through an arrangement with an external consultant he hired for the bank. A police investigation is ongoing, according to the report.

Santander had initially planned to appoint Broedel as chief accountant and to its senior management team but reversed course in June after the allegations emerged, the report said.

He remained at the bank and was named executive vice president in the strategy group in September, according to the Financial Times.

A person familiar with the matter told the newspaper that Broedel has since been moved into a "non-critical role."

A spokesperson for Broedel told the Financial Times that he "vehemently denies" Itau's allegations and has filed separate legal action seeking damages.

Santander did not immediately respond to MT Newswires' request for comment.

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