The lawyer Miguel Reis who now is representing many BES investors, claims that the Bank of Portugal has grossly 'distorted reality' and that the information provided by the central bank on Friday is simply a whitewashing excercise.
On Friday, the Bank of Portugal issued a statement after a meeting with some holders of Espírito Santo Group (GES) bonds in which it reaffirmed that Novo Banco does not have to compensate customers who bought investments in branches of BES, and that a solution will only be found if it does not cost Novo Banco any money.
Miguel Reis who represents GES bond holders, said the statement from the Bank of Portugal "does not surprise anyone and only serves to confirm that we live with a wild banking system without the control of a responsible regulator."
Miguel Reis stressed that Banco Espírito Santo "concluded contracts under which its customers lent it money so that it could lend to companies in the Espírito Santo Group.”
"So it seems to me that this money should be treated like any other deposits in BES," and hence should be repayable by Novo Banco.
On Saturday, a new association of aggrieved bondholders said it will "start a lawsuit against the Bank of Portugal" if the central bank does not show a willingness to negotiate on this issue.”
The association does not rule out taking Novo Banco to court as it does not agree with the refusal by both banks to take the matter seriously.
"Initially, there was an agreement by both the Bank of Portugal and Novo Banco to reimburse or indemnify us in respect of the commercial paper and this refusal is unacceptable," added association spokesman Ricardo Angelo.
The victims already have said that they would continue their struggle, and would take to the streets to have their rights respected. Last Thursday, about fifty bondholders invaded the premises of Novo Banco in the Avenida dos Aliados in Oporto in a protest that lasted two hours and gained widespread media coverage.
On the same day, the President of Novo Banco, Eduardo Stock da Cunha said to a parliamentary committee of inquiry that he refused to "throw in the towel" on the issue of bondholders but saw no way forward as Novo Banco was not duty bound to compensate these investors, although he did feel rather sorry for them.
