Managers of the New Zealand Superannuation Fund, announced today that they are pressing ahead with a lawsuit against the Bank of Portugal.
At issue is the money lost when the Bank of Portugal’s Governor Carlos Costa decided that the New Zealander's pension money invested in BES, as part of a Goldman Sachs €835 million deposit, should stay at Banco Espírito Santo ‘bad bank’ when BES collapsed last August.
The New Zealand fund managers "challenge the validity of a decision by the Bank of Portugal and want the Goldman Sachs (Oak Finance) investment transferred to Novo Banco from bad bank Banco Espírito Santo."
The statement adds that this legal process is taking place "at the same time as an action already filed in February in a UK court against Novo Banco to recover the €142 million it is owed."
The New Zealand pension fund chief Adrian Orr and Finance Minister Bill English had to answer some tricky questions as to how the country’s Superannuation Fund had managed to lose the money in a ‘risk-free’ investment through Oak Finance, organised by Goldman Sachs.
The New Zealand deposit was made just weeks before BES collapsed, rendering the investment worthless.
Adrian Orr said the entire investment had been written off as a "conservative" measure and he now seeks to recover it through the courts.
BES collapsed in August 2014 and chief executive Ricardo Salgado was arrested and bailed on a €3 million surety.
Goldman Sachs which organised the investment said it is to "pursue all appropriate legal remedies without delay" to recover Oak Finance loan to BES and was angered when the Bank of Portugal went back on its assurance that the investment was safely to be moved to the refinanced Novo Banco.
Adrian Orr denied in the New Zealand parliament that the investment has been a high-risk one and said the Superannuation Fund was insured but that a rather cunning retrospective rule change in Portugal had resulted in this insurance becoming void.
Carlos Costa's Christmas 2014 U-turn has caused local and international repercussions with the New Zealanders joining Goldman Sachs and thousands of BES shareholders in pursuing the Bank of Portugal, aka the Portuguese taxpayer, for compensation.