Deloitte warned CGD and Bank of Portugal about Berardo in 2008
The international auditors Deloitte issued various internal warnings to both Caixa Geral de Depósitos and the Bank of Portugal in 2008 that multi-million euro loans made to art collector Joe Berardo had insufficient guarantees.
In fact, various warnings were made to Caixa Geral over the years that the loans made to the Madeira-born businessman were not adequately backed by collateral.
The State-run bank began issuing loans to Joe Berardo in 2006 which were used by the metals and mining millionaire to buy up shares in bank BCP.
Deloitte handed over warnings that “collateral ratios have not been complied with” to the CGD Board which at the time was led by Faria de Oliveira.
But at least one former director of Caixa Geral de Depósitos, José Pedro Cabral dos Santos, said he didn’t remember who was the director who had authorised one set of loans worth €350 million to the José Berardo Foundation against the expressed reservations made by public bank’s risk assessment department in 2007 which stated that guarantees offered by Berardo were “insufficient to cover the risk”.
At a Parliamentary committee, José Pedro Cabral dos Santos said that Joe Berardo, owner of one of the finest modern art collections in Europe (Berardo Collection), was “always treated with kid gloves but never received special attention” at the bank. “As far as I know, Metalgest and the José Berardo Foundation were never given extra-special attention at Caixa or even treatment that fell beyond the rules” he said.
He was talking in the wake of an audit report by Ernst & Young which pointed to millions of euros in ruinous loans made by Caixa Geral de Depósitos over a period of 15 years from 2000-2015.
Last week a court in Madeira gave CGD authorisation to call in combined loans to Joe Berardo of €6.6 million which the entrepreneur had tried to have suspended.
Despite owning one of the best modern art collections in Europe – the Berardo Collection – which is currently housed in Lisbon’s Cultural Centre (CCB) in Belém and worth an estimated €500 million euros, a Government agreement prohibits their sale to third parties until 2022.
Caixa Geral, BCP and Novo Banco decided in 2017 that since Joe Berardo would be unlikely to repay his massive debts, they would start legal proceedings to seize 75% of the Berardo Foundation collection of modern art which was indirectly pledged as collateral through promissory notes issued by the foundation.
But the court had been unable to decide whether the Foundation is an entirely separate legal entity or that the art collection is the personal property of the art collector or that of the foundation and therefore legally liable assets to pay off the debts.