Grupo Espírito Santo has used a secret financial company to pay unknown people undisclosed sums totalling an estimated €300 million in the past 10 years.
These covert payments were made through a mysterious company called Espírito Santo Enterprise which handled hundreds of millions of euros and which only now may be investigated by the judicial authorities.
Espírito Santo Group has been channelling money for years to Espírito Santo Enterprise so it could make the "extra payments" and the guessing game as to who have been the lucky recipients is topic of the week.
Investigation notes by journalists at Público have been passed to the authorities investigating the GES/BES collapse and new enquiries now should be made into the role of Ricardo Salgado, Espírito Santo Enterprise, and to whom it was shovelling money.
Over the last decade, Espírito Santo Enterprise received funds via Swiss intermediaries up to a staggering €300 million intended for ‘undocumented expenses’ and for distributions to third parties, according to Público.
The records of this personal slush fund for family members' business are unlikely to exist but the former Grupo Espírito Santo accountant, Machado da Cruz, has been in Lisbon providing some explanation to the authorities about the relationship between Espírito Santo and Eurofin and now would be a good time to ask him about the mysterious Espírito Santo Enterprise transfers and specifically who received payments from this tax haven based company.
Salgado has refused to make any statements apart from those at his first and only hearing at the Central Criminal Court in Lisbon after he was arrested and charged with fraud, breach of trust, forgery and money laundering.
In a separate enquiry, but one that certainly will come across various Espírito Santo companies, Portugal’s Tax Authority now is investigating the relationships of all Portuguese companies with Luxembourg to assess whether any have benefitted from cosy deals to pay a minimum rate of tax in Luxembourg rather than higher rate in Portugal.
These arrangements were highlighted yesterday by the International Consortium of Journalists and pointed the finger at the President of the European Commission Jean-Claude Juncker who was the Luxemburg leader for 20 years and oversaw sweetheart deals with companies such as Pepsi, Apple, Ikea, FedEx, Heinz and Amazon.
Luxembourg agreements with these companies between 2002 and 2010 represent billions in tax revenue lost by the various EC states where companies make their profits yet paid zero or little corporation tax.
"The Luxembourg tax authority keeps these agreements secret and does not notify its European partners," wrote Le Monde this week.
Documents obtained by the International Consortium of Journalists were from PricewaterhouseCoopers "who drafted and negotiated the terms with the Luxembourg government," added the French daily.
It is not yet clear why the media is doing the job of government departments and regulators, but so it ever was when corruption has become part of the way of life for self-serving, greedy and amoral governments.
Comments
All the major multi-nationals originating in the devloped world sign up to do things 'ethically' .... but it falls down when operating in the less developed world.
The overseas branches just have no concept of ethics - as shown by paying full taxes. Then bundle in reduced rate tax sweeteners to get multi-nationals to locate in your country - such as Irelands.
A slippery slope as it soon morphs into almost total tax avoidance schemes as run in Luxembourg and the tax havens.
A total mess. The World Trade Organisation or similar should get a grip on it ... not least to discover who is financing the Jihadists and other terrorist groups !!
It may sound alarmist but extreme tax avoidance schemes could also be seen as a form of terrorism. It distorts the normal management of society to have a section of its population out of societies control, able to do what they like - when they like.
If chez promises not to employ any of his friends and family if elected he can have my vote !