Lone Star: Novobanco boss acted with “total integrity”

 In Banks, News, Novo Banco

Lone Star, the US investment fund who owns 75% of Novobanco, says the bank’s CEO acted with “total integrity” regarding ex-Benfica boss Luís Filipe Vieira who left the bank with millions owing over soured property deals.

It said that an internal but independent inquiry had shown there was no proof which would have compromised the professional integrity of Novobanco CEO António Ramalho.
There had been question marks about António Ramalho’s conduct regarding Luís Filipe Vieira who owed millions to Novobanco from an inherited debt from Banco Espírito Santo over 10 years ago.
However, these doubts have been ruled out following an audit carried out by the bank itself into allegedly compromising information from telephone taps involving the CEO.
After the investigation was completed, Lone Star states: Ramalho acted with “total integrity” in relation to Vieira and other questions that may have been raised to do with the phone tapping conducted as part of Operation Red Card and there was no proof that would have compromised his professional conduct”.
Lone Star has held a 75% shareholding in the financial institution since 2017. Its General Supervisory Board is led by Byron Haynes. It was this board which commissioned an internal independent audit to look into António Ramalho’s conduct in the wake of news about the telephone taps in which António Ramalho was discovered scheduling a meeting with Vieira to help him prepare for a parliamentary inquiry hearing in which the prepping was allegedly so that the two men could get their stories straight over Vieira’s debts which had led to Novobanco losing millions.
In Operation Red Card the former Benfica president is under investigation for having allegedly received bribes amounting to around €10 million linked to more than 50 player transfers between 2012-2020.
Novobanco had argued in letter sent to parliament that a suggestion from Iberis (linked to businessman José António dos Santos) to buy back the debt owed to Novobanco by development company Imosteps (which was owned by Luís Filipe Vieira), did not constitute a conflict of interest as stated by the Resolution Fund.
According to the Public Prosector’s office, Imosteps’ debt caused Novobanco to lose €45.6 million, and Luís Filipe Vieira had intended to buy it back in order to eliminate personal guarantees associated with the loan.
But this loan purchase could not be made by Vieira or by related parties, so it was alleged that a Novobanco director warned him about it.
The Imosteps debt was later included in a portfolio of NPLs called Nata II. The Public Prosecutor was convinced that this director had initiated proceedings using International funds that typically buy up bad debt (in this case Bain and Davidson Kempner)
“Knowing that Novo Banco wanted to close the sale of the ‘Projeto Nata II’ debts by the end of June and having been informed by the bank director about the inclusion of Imosteps’ debt in Nata II and the best way to withdraw it , the defendants Luís Filipe Vieira and Tiago Vieira then decided to come up with a scheme that would allow them to present a written proposal,” a prosecutor’s office document reads.
The Public Ministry had highlighted an alleged “privileged relationship” between Vieira and a former Novobanco director which prosecutors believed helped Vieira side-step the millions in personal guarantees on his debts.