Friday, 21 July 2017
A- A A+

SALGADODEC2015The Bank of Portugal has blamed Ricardo Salgado and eight of his colleagues for a range of management and fiscal offences that led to the fall in 2014 of the Espírito Santo empire.

Ricardo Salgado has been fined €4 million by the regulator and is not allowed to be in charge of any business for ten years, effectively a lifetime ban.

The Bank of Portugal cites five illegal acts that Salgado committed: the manipulation of information, €500,000, the intentional lack of a sound and effective risk management system, €500,000, intentional acts of ruinous management, €2 million, providing false information, €2 million and breaking the ‘conflict of interest’ rules €750,000.

These individual fines add up to €5.5 million but Salgado will have only to pay €4 million since at the time of the offences there was a ceiling of €4 million.

Amílcar Morais Pires and José Manuel Espírito Santo also were condemned by the Bank of Portugal, issued with fines and also are banned from controlling any company.

Pires will have to pay a fine of €600,000 and is banned from the financial sector for three years. José Manuel Espírito Santo was sentenced to pay €525,000 fine with 50% of it suspended for five years. He also is banned from controlling any company for two years.

Convicted of negligence, but suffering no penalty, were Joaquim Goes, António Souto, Pedro Costa, José Maria Ricciardi, Fernando Coelho and João Pedro Guimarães.

Acquitted in the investigation were João Freixa, Jorge Martins, Manuel Fernando Espírito Santo, Ricardo Abecassis, Rui Silveira and Stanislas Ribess.

Ricardo Salgado’s lawyer said that his client will go to court to appeal the Bank of Portugal’s decision and accused the Bank of prejudice.

"This is not a process, it's a scam. It is a decision by a party which was already decided before the supposed findings of fact," said lawyer Francisco Proenca de Carvalho.

Amílcar Morais Pires, the former financial director of Banco Espírito Santo, said after receiving his fine that the irregularities discovered in the financial statements of Espírito Santo International (ESI) were "unpredictable and undetectable earlier."

Morais Pires was convicted of falsifying BES accounts and of irregularities in the sale ESI debt to BES clients.

The regulator concluded that Morais Pires was responsible for the non-implementation of an information and communication system, and of not operating a sound and effective risk management system.

In its defence, Morais Pires said the accounts had been tampered with and no risk control system could have detected this. Anyway, he insisted, BES had adequate risk management systems and information and communication systems “that were in accordance with the best practices of international banking.”

Morais Pires insisted that he has no idea that ESI’s accounts were doctored, (in fact they were an impressive work of fiction) and anyway, everyone knew about the sale of ESI debt, including the auditor KPMG.

All these convictions issued by the Bank of Portugal, in its role as Portugal’s financial regulator, can be appealed in court so the chances of anyone having to write out a cheque in the immediate future are slim indeed.

Comments  

+1 #3 Dennis.P 2016-06-06 15:26
Foreigners will never get a handle on the kid glove treatment of today's Portuguese elites without factoring in not only the power and influence they still have in society but more importantly the 'unchecked' terror they were capable of unleashing in yesterdays Portugal. Which several million elderly Portuguese are only too aware of what happened then. For them there are still so many indications every day in the news of the endemic corruption, abuses of power and influence, cronyism.

RTP - the more obvious of Portuguese Government mouthpiece - has a series coming about the reign of fear of the (Secret) Political Police that so fearfully oppressed ordinary Portuguese since 1926. With which families like the Espirito Santo's would have been quite familiar. But in a striking contrast to the average Portuguesers knowledge of British history in the last 2 centuries - here they know almost nothing about this period.

Trata-se de um período relativamente pouco conhecido da maioria dos portugueses.

http://www.rtp.pt/noticias/cultura/a-pide-antes-da-pide-nova-serie-da-rtp_n921901
Quote
+2 #2 Ed 2016-06-06 08:57
Quoting Peter Booker:
I must say that I am impressed with the leniency of these fines. Remember that Salgado is on a pension of €90 000 per month. I am puzzled at the process - this is plainly not a criminal court case. How are these people obliged to pay up?

Will the criminal courts now pick up on the massive swindle inflicted on Salgado´s own customers and prosecute Salgado himself, with the threat of imprisonment? Will the fines, if they are ever paid, go towards the compensation of those who have been so shamelessly ripped off?

Or will "the rules" continue to protect the author of this massive scam?

The fines go to the regulator.

Those fined will be taken to court if they do not pay.

Those who do not wish to pay may go to court to let a judge decide if the regulator's fines are justifiable.

This BoP investigation has nothing to do with the parallel criminal investigation into Salgado's behaviour. In fact these fines seem restricted to events surrounding ES International, its 'misreporting' and the sale of debt to BES customers, so covers but one small part of the long charge sheet.

More action as and when!

Ed
Quote
+7 #1 Peter Booker 2016-06-06 07:53
I must say that I am impressed with the leniency of these fines. Remember that Salgado is on a pension of €90 000 per month. I am puzzled at the process - this is plainly not a criminal court case. How are these people obliged to pay up?

Will the criminal courts now pick up on the massive swindle inflicted on Salgado´s own customers and prosecute Salgado himself, with the threat of imprisonment? Will the fines, if they are ever paid, go towards the compensation of those who have been so shamelessly ripped off?

Or will "the rules" continue to protect the author of this massive scam?
Quote