Troubled banking group BES today saw its shares drop a further 9% on the Lisbon stock exchange.
The bank is undergoing painful changes in management that have seen the controlling family, descendants of the founders, lose their overall control due to an urgent share issue diluting their cherished holdings.
Shares in BES have tumbled by over 15% since last Thursday and by mid-afternoon today BES shares had dropped the most of any Top Twenty company in Portugal. Shares in the holding company, Espírito Santo Financial Group, which in turn owns 25% of BES, dropped 3.89%.
Bank shares in general took knocks today with BCP falling nearly 5% during trading as rumours circulated about a need for an increase in the bank’s capital.
BES and Espírito Santo Financial Group (ESFG) have experienced a turbulent period that culminated last Friday in former CEO and Chairman Ricardo Salgado leaving the under a cloud caused by accounting irregularities dating back to 2008.
Word on the street in Lisbon is that Salgado will not leave the bank entirely as a cushy job has been found for him chairing a new Strategic Council.
This has to be proposed and agreed at an Extraordinary General Meeting which has been scheduled for July 31. This meeting has been convened formally to confirm new appointments and to give shareholders a chance to air their views on the mishandling of their company.
How Salgado will explain the €1.2 billion liability buried in the accounts since 2008 and covered only by a narrative involving fictional Angolan indemnities, remains to be seen.
