A group of 144 small shareholders and investors has filed an injunction with the District Court of Lisbon requesting the seizure of all the property and assets of ‘bad bank’ Banco Espírito Santo.
The group of shareholders and investors in financial products, controversially sold over the counter in BES branches, is supported by the Consortium for the Defence of BES Investors.
The group demands the arrest of all BES assets apart from those already transferred to Novo Banco in the split last August when their deposits turned out to be highly risky investments in troubled Grupo Espírito Santo subsidiaries.
An estimated €720 million saved by as many as 7,000 families evaporated in the good bank/ bad bank BES carve-up last August and this action marks the start of legal activity in place of negotiations which have come to nothing mainly due to the intransigence of the Bank of Portugal governor Carlos Costa.
The group also wants the BES tax credit back from the taxman. This credit mysteriously was transferred to good bank Novo Banco but the petitioners argue the credit was generated exclusively by BES activity and should form part of its current assets.
One year after the botched resolution, the group says that that BES’ remaining assets "are likely to be dissipated" to third parties, so it wants to prevent the uncontrolled depletion of BES assets which will leave them nothing to share.
Lawyers acting for the Consortium for the Defence of BES Investors do not accept that BES assets simply can be sold off, which currently they are, without taking their clients’ claims into consideration.
In the injunction, the 144 small shareholders and investors jointly state that they "believed the lies of Portugal’s President and of the Governor of the Bank of Portugal, when both said that Banco Espírito Santo was a safe and sound bank" just before it went spectacularly bust under the management of Ricardo Salgado who faces charges ranging from money laundering to falsifying documents.
The Bank of Portugal took control of BES in 2014 after the bank presented shock half-yearly losses of €3.6 billion rendering it insolvent.
The so called ‘resolution’ by the Bank of Portugal involved dividing the bank into two parts, BES and Novo Banco. 'Bad bank' BES kept the BES name and acted as a depository for BES’ toxic assets and liabilities, while the 'good bank' Novo Banco was financed by the taxpayer and other high street banks and now is close to being sold off at a significant loss to the taxpayer.
This action against BES will not impede the Novo Banco sale but may halt asset disposals at BES which currently is presided over by Luís Máximo dos Santos who has just had his contract extended by one year.