The Luxembourg Court has rejected the July applications by Espírito Santo International and Rioforte for protection from creditors which would have given the management teams of both companies time to work out a solution to their problem.
The problems are too severe for the court to give any credence to the rescue plans submitted.
The judicial process relating to these companies is confidential and a statement relating to Espírito Santo International simply read that “the Court of Commerce of Luxembourg today decided not to allow the controlled management of Espírito Santo International."
The court statement explained that "the liquidation of the assets of Espírito Santo International SA will be decided by a court appointed liquidator and the creditors of the insolvent company will be reimbursed from the full liquidation of the debtor's assets, which will be held in the most expeditious way possible."
The Luxembourg court announced also that it had rejected the application for controlled management presented by Espírito Santo offshoot Rioforte on July 22nd. Citing the confidentiality of the process, no other details were revealed.
These decisions take the control of the two Espírito Santo companies from their management teams, leaving this part of the empire to be run and wound up by the liquidator, a shameful and embarrassing end to a network of companies run by Ricardo Salgado who was arrested and is on bail pending the conclusion of enquiries into his role in a massive money laundering operation.
At the same time as this criminal investigation is running, there are two other enquiries into Salgados’ businesses and alleged criminal behaviour.
The first is a parliamentary enquiry which currently is deciding as a group which individuals it wishes to question; Salgado inevitably will be the start turn, and hopefully Carlos Costa the governor of the Bank of Portugal who knew about the financial problems at Espírito Santo International in December 2013.
The Bank of Portugal questioned the veracity of guarantees from the Angolan government which apparently underwrote €4 billion in loans. By never making its concerns clear or public, Salgados game could continue through the first half of 2014 before he hit a brick wall, losing everything that his rather more illustrious ancestors had created and accumulated.
The second it the Bank of Portugal’s enquiry which, as the bank is run by a key witness, is unlikely to produce anything of value, unless the governor finally realises that his position has been so seriously compromised that resignation is the only sane option before the enquiry has gone too far that any result will be tainted by his controlling spin on its findings.
Comments
This whole businesss just emphasises why Portugal should never have been allowed anywhere near the EU.
The Espirito Santo group must have been illegally money laundering and evading tax since the first day the bank began business over 100 years ago.
After all - insulting a tax officer is an entirely new 2015 law; but it makes clear that it is not much newer than the requirement for 'tax paying'.
But what is particularly nauseating is how these Portuguese happily intentionally break every international law of business for decades when it suits them .... then run towards another law designed for responsible companies to wind down their affairs.
OK Luxembourg is not exactly leading edge openness in money matters but at least their administrator will ideally be able to unravel an indication of how much European Union restructuring money never reached Portugal. Going straight off-shore.
We watch with enthusiasm ...