The Bank of Portugal has blamed Ricardo Salgado and eight of his colleagues for a range of management and fiscal offences that led to the fall in 2014 of the Espírito Santo empire.
Ricardo Salgado has been fined €4 million by the regulator and is not allowed to be in charge of any business for ten years, effectively a lifetime ban.
The Bank of Portugal cites five illegal acts that Salgado committed: the manipulation of information, €500,000, the intentional lack of a sound and effective risk management system, €500,000, intentional acts of ruinous management, €2 million, providing false information, €2 million and breaking the ‘conflict of interest’ rules €750,000.
These individual fines add up to €5.5 million but Salgado will have only to pay €4 million since at the time of the offences there was a ceiling of €4 million.
Amílcar Morais Pires and José Manuel Espírito Santo also were condemned by the Bank of Portugal, issued with fines and also are banned from controlling any company.
Pires will have to pay a fine of €600,000 and is banned from the financial sector for three years. José Manuel Espírito Santo was sentenced to pay €525,000 fine with 50% of it suspended for five years. He also is banned from controlling any company for two years.
Convicted of negligence, but suffering no penalty, were Joaquim Goes, António Souto, Pedro Costa, José Maria Ricciardi, Fernando Coelho and João Pedro Guimarães.
Acquitted in the investigation were João Freixa, Jorge Martins, Manuel Fernando Espírito Santo, Ricardo Abecassis, Rui Silveira and Stanislas Ribess.
Ricardo Salgado’s lawyer said that his client will go to court to appeal the Bank of Portugal’s decision and accused the Bank of prejudice.
"This is not a process, it's a scam. It is a decision by a party which was already decided before the supposed findings of fact," said lawyer Francisco Proenca de Carvalho.
Amílcar Morais Pires, the former financial director of Banco Espírito Santo, said after receiving his fine that the irregularities discovered in the financial statements of Espírito Santo International (ESI) were "unpredictable and undetectable earlier."
Morais Pires was convicted of falsifying BES accounts and of irregularities in the sale ESI debt to BES clients.
The regulator concluded that Morais Pires was responsible for the non-implementation of an information and communication system, and of not operating a sound and effective risk management system.
In its defence, Morais Pires said the accounts had been tampered with and no risk control system could have detected this. Anyway, he insisted, BES had adequate risk management systems and information and communication systems “that were in accordance with the best practices of international banking.”
Morais Pires insisted that he has no idea that ESI’s accounts were doctored, (in fact they were an impressive work of fiction) and anyway, everyone knew about the sale of ESI debt, including the auditor KPMG.
All these convictions issued by the Bank of Portugal, in its role as Portugal’s financial regulator, can be appealed in court so the chances of anyone having to write out a cheque in the immediate future are slim indeed.
