Portugal shocked over Berardo attitude
Portuguese politicians, commentators and the social networks have reacted with fury, disbelief and shock at the diffident way a multi-millionaire businessman who owes Portuguese public and private banks a billion euros answered questions before a parliamentary inquiry.
Madeira mining entrepreneur Joe Berardo, who made a fortune in South Africa among other countries and who borrowed up to €1Bn from State-owned bank Caixa Geral de Depósitos and other banks using shares and promissory notes issued by his art foundation as collateral to secure the loans, says he has no means of paying the money back apart from “a garage in Funchal”.
At the fortnightly parliamentary debate on Monday even the Prime Minister of Portugal, António Costa, said he was shocked at the way Joe Berardo had behaved before the parliamentary committee with evasive answers and laughing as though the inquiry was a joke.
“I hope that justice works in the case of Joe Berardo and the millions he owes to the bank” and stressed that: “there is no reason for CGD to write-off any type of loan.”
The banks that the maverick millionaire owes money to, are trying to seize a considerable part of his modern art collection – Berardo Collection – that is on loan to the Portuguese government and on display to the general public at Lisbon’s Cultural Centre in Belém – CCB.
The problem is that the collection is considered one of the finest private modern art collections in Europe, rivalling in some areas London’s Tate Modern in terms of its installations and early 20th century expressionist masters and as such attracts millions of overseas tourists every year.
The other issue is that the Berardo Foundation shares which were used as guarantees to back the loans are not legally bound up with the actual art collection itself which is making it difficult for the banks to get their hands on it to sell at auctions and liquidate the loan from the proceeds.
“The country is clearly shocked at the diffident and indifferent way in which Joe Berardo responded last week to parliamentary deputies at the Caixa Geral de Depósitos,” inquiry”, said the Prime Minister.
“It is not down to me to speak here about former management decisions taken at Caixa, but what I can say is that the current management at Caixa appointed by this government has ordered Joe Berardo to pay Caixa what he owes,” said António Costa in reply to left-wing Bloco Esquerda leader Catarina Martins.
Caixa Geral, BCP, and Novo Banco jointly filed a ‘summary execution’ order in a Lisbon court last month for debts of €962 million.
The banks cited Joe Berardo and three associated companies, the José Berardo Foundation, Metalgeste – Sociedade de Gestão, Sgps and Moagens Associadas SA.
At the end of 2017, the Berardo Foundation had a black hole of €517 million while the 861 art works were only valued at €316 million by independent valuers.
Furthermore, Berardo stood his art collection up as security via Berardo Foundation shares for all the three bank loans he contracted in his bid to become the principal shareholder and therefore owner of Portuguese private bank BPC when in fact he legally doesn’t even own it the collection.