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Salgado hid €1.3 billion on an Excel spreadsheet

SALGADODEC2015Ricardo Salgado has been accused of keeping two sets of books for Espírito Santo International using a simple Excel sheet on a computer in his office on the 15th floor of the BES headquarters in Lisbon.

The revelation was made by an accounts manager at the Espírito Santo Group, being questioned by members of the commission of inquiry looking into BES and its collapse.

This parallel accounting spreadsheet contained data recording the real financial situation of Espírito Santo International and was updated every month.

The Excel sheet was started in 2008 when a relatively paltry deficit of €180 million was concealed.

The lies continued each month with the true financial situation successfully hidden from view until, five years later in late 2013, the deficit has ballooned to €1.3 billion which even Salgado was having trouble in explaining away.

Salgado’s stand-alone computer recorded in detail the true losses and according to the accounts manager, when the scale of debts finally needed to be announced, the former CEO gave him a direct order to keep quiet as to the double record keeping that has been going on and to tell the internal auditors that there had been a €1.3 billion ‘accounting error.’

The accounts manager said he could not contradict the request by Salgado and was told that if he spilled the beans, the probable collapse of Grupo Espírito Santo would be down to him.

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-11 #3 Ed. Jones 2015-04-20 09:22
Anyone wanting a peek into the murky world of Portuguese banking regulation should re-read about the 'investigations' into their missing billions by the Portuguese government into Public Private Partnerships.

Driven only by the Troika's repeated insistence to track who got what. And why so little was done for all those billions.

The first investigation featured Portuguese banks who helpfully fell in with the Government line that all the contract paperwork on who signed what and agreed to what - had gone missing. On both sides.

Which helped the current Finance Minister in declaring, although it was then her job to scrutinise PPP's - that she had nothing to do with any of the mess. Could anyone prove she knew what was going on ?

Nasty Troika then forced a 2nd investigation involving the non-Portuguese banks. Who, faced with losing their millions - provided their side of the paperwork. Then mysteriously the Portuguese PPP contracts were 're-found' in an unused desk.

And surprise surprise ... there was the Fin Mins signature. As she said at the time 'I didn't understand what I was signing'. Poor dear.
-12 #2 Dan Brown 2015-04-20 07:22
There is a curious repetition of '2008' (roughly the start of the crisis) as though the Portuguese elite VIP's went bad round about that time.

An easy excuse and entirely misleading that many Portuguese will trot out to us.

Few seem to grasp that it was the tightening up by banks globally that revealed what Portugal's banks had been up to for as long as they had existed. Their raison d'etre - to be endlessly washing dodgy money.

Note how quickly from 2008 almost all Portuguese banks appealed for Government bail outs or takeovers. Triggering fraud and corruption investigations. BES, well aware of how bad it was even then - standing away from the scrutiny needed before any bail out.

Just today we learn in Publico of Montepio bank having 2 billion invested in Portuguese businesses without any collateral security !!!

http://www.publico.pt/economia/noticia/bdp-prepara-divulgacao-das-conclusoes-da-auditoria-forense-ao-montepio-1692914

How can the rest of the EU have any confidence in a country with such as 'distorted reality' of correct behaviour?
-10 #1 Elsa 2015-04-19 20:17
parallel accounting spreadsheet ...

Let us not be so naive as to not be aware that every OTOC accountant in Portugal is well aware of parallel accounting from their study days and is happy to use it in their daily work with their important Portuguese clients.

Just like every Portuguese Advogado is fully aware that the laws they study in University for their exams are just a front to the 'real laws of Portugal'. These 'real laws' are what matters.

Remember that Salgado (and Socrates) up till 9 months ago were entirely immune to the '(international) University laws' that govern lawyers in developed countries. As with Golden Visas and so much else that is illegal.

We have only seen action from Portuguese VIP's since Brussels and the IMF (and the Finns!) made it clear that there was now a new game in town - morality and law abidance. Only this matters.

Yet all the law enforcers, judges and politicians have been trained and are following the previous 'real laws of Portugal'. So don't expect any change soon.

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