Suspended Benfica boss bail set at €3 million

 In Banks, Corruption, Football business, News

Luís Filipe Vieira who has temporarily suspended his mandate as president of Benfica Football Club until he clears his name from €100 million fraud and tax evasion charges has been placed under house arrest until he finds €3 million in bail money or equivalent assets.

The case has also placed a cloud over the appointment of Vítor Fernandes, the chairman of Portugal’s new development bank Banco do Fomento and his past professional honesty record given that he would be in charge of potentially handing out tens of millions of euros of EU ‘bazooka’ funds to potentially innovative new companies in Portugal.
Luís Filipe Vieira will remain under house arrest without an electronic tag until he provides bail worth €3 million which can be in cash, shares or property. That was the decision from ‘super’ judge Carlos Alexandre in the ‘Red Card’ case after quizzing Vieira on Friday.
Vieira is suspected of crimes of “breach of trust, qualified fraud, tax evasion and money laundering” regarding “facts” relating to occurrences which would have taken place from 2014 until the present and could involve losses to the Portuguese tax payer of funds of up to €100 million and charring exorbitant commissions for player transfers channelled into shell companies and used to pay off debts owed by financially troubled companies owned by Vieira.
Vieira’s lawyer Magalhães e Silva called the measures “patently excessive” but it is not yet known if he will be able to appeal against the decision.
According to the newspaper Sol, Vítor Fernandes, who was appointed by the government to lead the new investment bank Banco do Fomento, is under suspicion of having helped Vieira to undertake an operation damaging to the Resolution Fund which has been bankrolling Novo Banco over the past seven years.
At that time Fernandes was a Novo Banco director and allegedly helped Vieira “recover his seized property assets” taken by the bank’s bailiffs for non-payment of bank loans, for “just 11% of the value of the loan”.
The financial manoeuvre ended up losing Novo Banco €80 million, 50% of which the bank may then have imputed to the bank’s Resolution Fund as unrecoverable impairments.
The origin of Vieira’s debts to Novo Banco go back to loans that were taken on between 2012 and 2014 with Banco Espírito Santo and which were contracted to invest in two promising deals in Brazil being promoted by an investment company called Promovalor which the football boss owned.
For these investments, Vieira set up two companies: Atlântico and Imosteps. The deals involved the private concession and exploration of a cemetery (a business worth a fortune in Brazil) and the purchase of a 112,000 square metres plot of land at the Tijuca National Park for the construction of luxury developments on what is considered to be one of the most expensive neighbourhoods in Rio de Janeiro. Vieira also lost money on loans for projects in the Algarve.
When the Espírito Santo Group collapsed in 2014, these properties given as surety to the bank by Vieira, were included in Novo Banco’s assets. But in 2019, following the sale of 75% of the bank’s capital to the US equity fund Lone Star, Vieira’s properties were integrated into the largest of Novo Banco’s property portfolios to be put up for sale (Nata II).
This Natas II portfolio corresponded to loans considered unrecoverable by the bank and its assessors and were sold off for an amount considered well below their market value.
The Portuguese Public Ministry, which tapped into the suspects’ telephone conversations for months, suspects that Novo Banco sold off the property and other assets based on an internal valuation report which hugely undervalued the assets in the portfolio in question.
So, instead of the bank selling off Vieira’s properties to pay off part of the loan, the loan was written off as unrecoverable with Vítor Fernandes allegedly helping Vieira set up a fraudulent scheme which has subsequently lost Novo Banco, and therefore the Resolution Fund and ultimately the Portuguese tax payer, millions of euros.