Santarém Court confirms the Bank of Portugal’s reason in the mega process that joins BESA and Eurofin – O Jornal Económico
The ruling on the appeals to Banco de Portugal’s fines against BES, the Espírito Santo Financial Group (ESFG) and former directors in the context of the BESA and Eurofin cases was read Thursday at the Court of Competition, Regulation and Supervision, in Santarém.
The fines were applied by Banco de Portugal (BdP) in June 2019 (BESA) and September 2020 (Eurofin).
Of the five appeals, two were partially granted, one by Rui Silveira and one by José Manuel Espírito Santo. Both went from intention to negligence. Rui Silveira’s fine was increased from 400 thousand euros to 120 million euros and that of José Manuel Espírito Santo was a mere admonition.
Gherardo Petracini saw the fine of 150,000 euros for the BES Angola process maintained. But the fine is suspended by three quarters for a period of five years.
This Thursday, the Competition Court sets the single fine of Ricardo Salgado at four million euros and at 3.5 million euros for Amílcar Morais Pires.
According to Lusa, who was watching the sentence, in a summary of the decision, which totals 1,900 pages, judge Mariana Gomes Machado communicated the application of a single fine of four million euros to Ricardo Salgado, considering that it was proven in the trial, started in June, a practice of all infractions imputed by Banco de Portugal to the banker, a judge justified the penalty as corresponding to the maximum allowed limit, taking into account the value of the fines applied in two other administrative proceedings that have already become final.
At issue in this knowledge were the resources obtained by Ricardo Salgado, object of the BESA case (fine of 1.8 million euros) and in Eurofin (4 million euros), Amílcar Morais Pires (fine of 1.2 million euros from BESA and 3.5 million euros from Eurofin), José Manuel Silva (1.25 million euros from Eurofin), with fines of 4 million euros on BES (suspended in full for five years) and of one million euros to ESFG.
Rui Silveira (fine of 400 thousand euros) and Gherardo Petracchini, who was responsible for the Espírito Santo Finantial Group (ESFG) internal control system, also appealed in the BESA process.
The person responsible for ESFG’s internal control system was sentenced by the supervisor, within the scope of the BES Angola (BESA) process, to pay a fine of 150,000 euros, suspended in three quarters for five years, for failure to implement internal control systems. and lack of identification of internal control deficiencies by ESFG.
In the Eurofin process, BdP also imposed fines of 4.0 million euros on BES (entirely suspended for five years) and of one million euros on Espírito Santo Finantial Group (ESFG).
This is the last major condemnation of Banco de Portugal linked to Banco Espírito Santo, in the process concerning the Swiss vehicle Eurofin and the operations that harmed the financial institution.
What was the Eurofin scheme? BES issued very long bonds, with certain issuance conditions, for example, a rate of 7% (yield) for 30 years. These bonds of BES were placed through a vehicle and were sold to that Eurofin, but changing the conditions. Instead of a 7% yield, they sold with a 4% yield.
As a result, Eurofin sold these bonds with a 4% yield that were placed at BES branches. Investors purchased these bonds at a 4% yield. As this Eurofin would buy something with a yield of 7% and sell it with a yield of 4%, this allows it to take immediate possession of a capital gain without investment.
Therefore, bonds were issued at a discount and then when it was sold to customers it went without the discount, generating a loss for the bank.
This was added value channeled to finance as GES non-financial companies. The problem is that when the difficulties of GES are public, many of the holders of these bonds appeared at BES branches asking for reimbursement and the bank had to assume and repurchase bonds.
(Updated with information released by Lusa)