Portugal's Attorney General's Office is investigating the investment of €900 million by Portugal Telecom in Rioforte, controlled by the Espírito Santo Group, and other events surrounding the Group's financial meltdown.
The Public Prosecutor has confirmed that investigations into the problems at various Espírito Santo companies began before revelations reached the press and become public.
In a statement the Attorney General's Office confirms it now is in contact with the Securities Commission and the Bank of Portugal.
The investigation in fact began just before the revelation that PT and Rioforte were in bed together with PT lending Espírito Santo Group subsidiary Rioforte more than €850 million which it has since failed to pay back on time.
These revelations, news to some members of the PT board, undermined the merger terms between PT and Oi of Brazil and whiffs of scandal have interested the Attorney General's Office which has been playing catch-up ever since, hence its earlier holding statement, “under the law, it is not possible at present to provide further clarification of the investigations."
The Attorney General's Office did add that in the context of its ongoing efforts, "the Central Bureau of Investigation and Prosecution (DCIAP) has maintained contacts with regulators," i.e with the Bank of Portugal and the Securities Commission (CMVM).
The Office claims to have been tracking the BES scandal for several months, collecting information it deems to be relevant to determine whether crimes have been committed around any large transactions involving Espírito Santo companies.
The decision to expose Portugal Telecom's shareholders to a massive Rioforte corporate bond was not passed by the PT board of directors and caused two Brazilian PT directors to resign.
The merging companies ended up reviewing terms and the PT shareholding in the newly created company CorpCo dropped from 38% to 25.6% of the equity along with the PT share price.
The amendments to the terms of the merger were sorted out before the Rioforte defaulted on repaying PT for its corporate loan.
Another area of investigation for the Attorney General's Office are the accounts of Espirito Santo International which now has filed for court protection in Luxembourg.
There is a strong suspicion that documents have been falsified and according to former BES accountant, the former chief executive of Banco Espírito Santo, Ricardo Salgado should be investigated.
Comments
Ref: the Submarine bungs investigation and Portuguese requests to the Germans for their original material - not copies. The Germans reluctant as they understandably assumed these would go missing or get tampered with.
Hopefully the Luxembourg investigators will know now that the Portuguese judge threw out as 'biassed' the German court appointed investigators report into where the money went. A document sufficiently detailed to penalise the Germans in their courts ---
Can we assume that any Luxembourg requests for documents held in Portugal will now be seized first by the Portuguese investigators? If relevant to a prosecution 'being lost' or altered and the original destroyed ?
The Portuguese also requesting 'sensitive material' from Luxembourg ESG and doing likewise ....
The mind boggles !
The Angolan leadership having slammed their ex-colonial masters Portugal a year ago for dishonesty and general untrustworthiness.
Knowing now how so many locals and wise foreigners bank at great distances from where they live to attempt to minimise 'information leakage' ....
It would be great to sit in on Angolan Bank re-training sessions to their Lisbon staff. If ex-employees from Portuguese banks - the Angolans stressing the need for client account confidentiality at all times UNLESS an authorised investigation into irregularities is being carried out.
Then FULL COOPERATION !!!
The exact opposite of what local bank staff will have learnt to do previously ....