Passos Coelho continues in his attempts to distance himself and his government from the BES investment scandal.
In the opinion of the Prime Minister, it is up to regulators to solve the problems caused to 2,500 individual buyers of BES investments that were marketed as safe by BES branch staff but which in fact were invested by BES in a vain attempt to prop up parts of the crumbling Grupo Banco Espírito Santo empire which later failed.
The Prime Minister said today that it is for the regulators to sort out the problems of those people who bought investment products at Banco Espírito Santo branches and that the government would not intervene.
Passos Coelho said that this is a very delicate matter, which has been analyzed by the Securities Market Commission (CMVM), and by the Bank of Portugal and that the Government will not interfere in what evidently is the work of the regulators.
If the investors are successful in court, they already have launched a group action, the government may end up having to make good the lost investments. Either that, or Novo Banco may have to take on the investments making it an even less attractive proposition for any buyer.
BES shareholders based in Portugal have joined their Spanish counterparts in a joint legal action against those they see as responsible for their impoverishment and have appointed specialist lawyers Raposo Subtil e Associados who will "focus all their efforts on an assertive and effective defence of their 800+ members, all small shareholders of Banco Espirito Santo SA."
Consumer organisation DECO also is to represent BES shareholders and is taking legal action against the Bank of Portugal and the stock market regulator CMVM on behalf of over 2,000 small shareholders in Banco Espírito Santo claiming compensation for the financial damage caused to Banco Espírito Santo customers who were not warned of the true state of affairs at BES and associated group companies.
Wanting the buck to stop well before it hits his desk, Passos Coelho now can sit back and watch as the Bank of Portugal’s governor blames the stock market regulator, the investors blame the regulators, the bank staff blame the management and the courts start to set aside time to hear the various claims for compensation.
Comments
I expected to see Cavaco Silva´s name on this of blamees. But he must have taken lessons from Tony Teflon Blair.
Salgado recently said that he had meetings with Portas, Passos Coelho and Cavaco Silva to warn them of his financial difficulties. His purpose was clearly not to save his bank and its investors, but to give them time to make up their teflon defence.
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C. Silva indeed should be there. He has lied about his involvement in this affair, conversations he had but said he did not, and conversations he had with Dickie that he refuses to detail but which led to his defence of BES as a robust, strong and viable bank minutes before it went bust. CMVM are looking at who of the elite pulled money out 'just in time'
Ed.