“After the player signed a one-year deal (with the option of a second), Saint-Etienne demanded a transfer fee, contrary to what we had initially foreseen,” said Bastia in a statement.
Bastia, now coached by Claude Makelele, added that they had therefore decided not to go ahead with the deal for the 34-year-old.
However, Saint-Etienne responded by denying that they had ever demanded money for the player.
“Contrary to the claims of the Corsican club, the directors of ASSE have never asked for a transfer fee in relation to Brandao,” read a statement on their website.
Saint-Etienne also claimed that Bastia still owe them more than 150,000 euros ($201,000, £120,000) for the signing of the defender Sylvain Marchal two years ago.
Brandao, a title-winner with Marseille in 2010, had initially thought he had been freed from the final year of his contract with Saint-Etienne to allow him to sign for Bastia.