sábado, 25 de julho de 2015

Former head of collapsed Portugese bank BES put under house arrest / GUARDIAN / Banco Espirito Santo shareholders seek explanation / Portugal uses EU bailout cash to shore up troubled Banco Espírito Santo / GUARDIAN

 Ricardo Salgado was forced to step down as CEO of the Banco Espirito Santo, amid allegations of accounting irregularities, in June 2014 after 23 years at the top. His lawyer says his house arrest is disproportionate. Photograph: Aaron Josefczyk/Reuters

Former head of collapsed Portugese bank BES put under house arrest

A year since the bank collapsed, Ricardo Salgado has been questioned by a state prosecutor amid suspicion of forgery, breach of trust and tax evasion

Agence France-Presse

The former head of Portugal’s Banco Espirito Santo, Ricardo Salgado, was put under house arrest on Friday after being questioned by a magistrate over his role in the bank’s collapse, his lawyer said.

Francisco Proenca de Carvalho called the measure “disproportionate” in remarks to the press after the 12-hour questioning.

On Monday the former banker was questioned by the state prosecutor, who decided to send him for further questioning in front of an investigating magistrate.

The prosecutor referred in particular to suspicion of forgery, breach of trust, tax evasion and money laundering, in a statement released on Friday.

Once one of Portugal’s largest lenders, BES collapsed after reporting a record loss last year and its three holding companies declared themselves insolvent, facing allegations of accounting fraud.

The bank’s woes threatened to drag down Portugal’s economy, which had only gingerly emerged from a three-year bailout, prompting the government and the European Union to swiftly come to the rescue.

The assets of the ailing bank were transferred into Novo Banco as part of a €4.9 billion (US$5.4 billion) bailout of BES, including €3.9 billion from the government.

For a year numerous enquiries have been opened by the Portuguese authorities to determine who is responsible for the scandal.

Salgado was forced out as head of BES after 23 years in June 2014 amid allegations of accounting irregularities at one of the bank’s Luxembourg-based holding companies.

At a parliamentary session in December, Salgado denied “having given instructions” to falsify the BES accounts.

But the Bank of Portugal has since started a series of proceedings against most BES executives, including its former chief, suspected of “malicious acts” and “ruinous management”.

The authorities have also seized property belonging to the Espirito Santo family, Portugal’s last banking dynasty, and its financiers.


The questioning of Salgado comes a year to the day after his arrest in connection with another financial matter, where he was indicted for money laundering before being released on bail of €3 million.


People withdraw money from ATM machines in a Banco Espirito Santo (BES) branch in Lisbon, Portugal. Photograph: Mario CruzEPA MARIO CRUZ/EPA

Banco Espirito Santo shareholders seek explanation

Alleged irregularities at Portugal's largest listed bank has prompted fears about its capital base and a huge fall in the shaere price

Phillip Inman

Shareholders in Banco Espirito Santo were hoping to resolve concerns about the fate of the institution at an extraordinary general meeting on 31 July in Lisbon.

But a precipitous fall in its share price and a downgrade in the bank's bonds which forced the suspension of trading in its shares has brought the need for explanations forward by three weeks.

Dating its foundation back to 1869, Banco Espirito Santo is a cornerstone of financial services in Portugal and the biggest of the country's listed banks. It operates in more than 20 countries and has recently expanded into Libya and Mozambique. A London branch is used for wholesale banking, including syndicating loans for clients.

It is 25% owned by a subsidiary of Espirito Santo International (ESI). ESI has been under scrutiny since an audit found "material irregularities" at the Espirito Santo family holding company and the bank's shares have slumped on worries that the bank's capital base could be affected. The bank's shares have lost almost half of their value in the past month.

In essence, it appears the bank has lent money to the holding company and then sold the debt to its clients. When the loans were scheduled to be redeemed, the holding company has been unable to repay.

Reuters reported that the family is considering debt-for-equity swaps and may ask for more time to repay debts as it grapples with its financial problems.

Reuters said sources close to the bank had told it that potential asset sales were also being considered in the medium term, though such measures required even more thorough preparation because creditors and shareholders could later challenge any sale of distressed assets.

Luxembourg authorities said last month that they had launched an investigation into ESI over alleged breaches of company law.

Last week, Espirito Santo Financial Group (ESFG), which holds ESI's 25% stake in the bank, said the family's companies owed it €2.35bn in June, up from €1.37bn at the end of last year.

Carlos Costa, governor of the Bank of Portugal, confirms the crisis-hit Banco Espirito Santo (BES) would receive a bailout amid fear of a bank run. Photograph: Patricia De Melo Moreira/AFP/Getty Images

Portugal uses EU bailout cash to shore up troubled Banco Espírito Santo
Almost €5bn injection should stave off the collapse of Portugal's biggest bank, after losses wiped out its capital buffers

Chris Johnston

Portugal injected almost €5bn into Banco Espírito Santo on Sunday night to stave off the collapse of the country's biggest bank following a series of financial scandals.

Carlos Costa, governor of the Bank of Portugal, said the bank's healthy businesses would be spun off into a "good" bank, while its toxic assets would be hived off into a "bad" bank.

The bailout plan, which was agreed with Brussels, was sparked by the far bigger than expected €3.5bn (£2.8bn) net loss reported last week by the bank. The loss wiped out its capital buffers and sent its shares falling by more than 75% before the stock was suspended on Friday.

Espírito Santo is expected to be delisted from the Lisbon stock exchange, meaning that shareholders will be wiped out.

Costa said the injection of money would come mostly from Portugal's international bailout, which made €6.4bn available for bank recapitalisation through a fund set up by Portugal in 2012.

The fund is aimed at limiting the political fallout from using taxpayers' money to prop up a bank at a time when Portugal is only just emerging from a deep economic downturn. Pedro Passos Coelho, the prime minister, had pledged that taxpayers would not be called on to bail out failing banks.

The "bad" bank will hold the troubled assets, mostly related to its exposure to the Espírito Santo family, which has faced difficulties after financial irregularities were uncovered at one of its array of holding companies last year.

An audit ordered by the Portuguese central bank earlier this year discovered material irregularities at the Luxembourg-registered ESI, part of the empire.

Ricardo Espírito Santo Salgado, the chief executive of Banco Espírito Santo, was forced to resign and he was detained last month in connection with an investigation into money laundering and tax evasion. Santo Salgado was understood to have been a voluntary witness and said in January 2013 that he had always paid his taxes.

The central bank ordered the bank to raise more capital, but potential investors were deterred by the publicity surrounding the allegations facing the wider group and the prospect of more impairments being revealed in the future.

Portugal was bailed out by the EU and International Monetary Fund with €78bn in 2011, but left the rescue programme in May. That has given the country more freedom, although it is still bound by requirements to reduce its budget deficit.

It still has €6.4bn left from the original €12bn put aside to recapitalise the banking industry. The fund is financed by all banks in Portugal and has representatives of the country's central bank and the government on its board.

Last month, concerns about the bank rattled European financial markets.


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