A report into the appalling management of the State-owned bank, Caixa Geral de Depósitos, is finished and has been sent to the Public Prosecution service which will decide who of the former directors will face charges.
The government-sponsored audit was undertaken by EY, formerly Ernst & Young and the result of this work, which looked at the years 2000 to 2015, is with the Public Prosecution Service and the European Central Bank.
All eyes will be on the period of mismanagement between 2005 and 2008 when the bank was run more for the directors’ pleasure than to create profits to submit to the Treasury.
Caixa Geral also is deeply involved in the Operation Marquês investigation, which culminated in the indictment of 28 defendants for almost two hundred financial crimes.
The prosecution in this case maintains that former Prime Minister José Sócrates received millions of euros for securing funding from Caixa Geral de Depósitos for Vale de Lobo in the Algarve. The vice president at the bank was Armando Vara, a close friend of Sócrates, who is accused of receiving a kickback for pushing through the €226 million loan.
Also in the report will be coverage of the allegations by Observador from July this year that loans now in default, that had been granted to favoured people, were recorded as active, thus deliberately understating liabilities and misleading the government as Caixa Geral’s only shareholder.
The European Central Bank will be interested in finding out which bankers at Caixa Geral were at fault as some of them may remain in key positions at other banks.
But so far there have been no conclusions from the discussions that followed in the area of expertise and, therefore, Banco de Portugal is still not bound by the obligation to make this information public.
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