Espirito Santo chief denies wrongdoing, points finger at Bank of Portugal
LISBON (Reuters) – The former head of Banco Espirito Santo <BES.LS> on Tuesday denied any wrongdoing in the collapse of the bank his family founded and blamed the Bank of Portugal for accelerating its demise.
Portugal had to rescue the country’s largest bank, known as BES, in a 4.9 billion euro (3.87 billion pounds) bailout after its finances deteriorated due to exposure to companies linked to the Espirito Santo family business empire.
Ricardo Espirito Santo Silva Salgado, 70, BES’s former CEO, told a parliamentary hearing his family had not made a single penny from the banking operations now under investigation by authorities in Portugal and elsewhere.
Salgado, speaking in public for the first time since the rescue, said everything he did in the months before the collapse was intended to help the bank’s clients.
“My family and I have been summarily judged by public opinion, with accusations of illegality and flows of billions of euros to enrich ourselves in offshores (accounts), with personal fortunes hidden in Asia, mansions in Miami and castles in Scotland.
“All these stories are completely false.”
Salgado is the head of one of Portugal’s richest families, which has been in banking for generations and rebuilt the country’s leading bank after its return to democracy in 1974. The family has been described as the Rothschilds of Portugal.
A major investigation is now underway into the collapse of the Espirito Santo business empire and BES. Last month, police searched 34 homes on suspicion of fraud, tax evasion and money laundering.
The Bank of Portugal began the investigation after an audit found irregularities at one of the family’s Luxembourg-registered holding companies.
The authorities have accused the family of mixing its businesses with the bank and of using a complex bond scheme via offshore companies to cover family debts.
A calm and confident Salgado denied all accusations.
He said he was certain that helping clients had been the bank’s objective. “Neither the family, nor (bank) staff nor its management appropriated a single penny,” he said.
He blamed the collapse of the family business and the bank on the Bank of Portugal’s demands to “ring fence” the bank from the debts of the family’s businesses.
He said the time they were given and the ring-fencing, prevented a restructuring.
“A resolution in seven months was completely impossible. The only thing we asked the Bank of Portugal for was time,” he said.
“BES did not go bust. BES was forced to disappear.”
