Haitong bank sues Novobanco for hundreds of millions of euros

 In Banks, BES GES, Lawsuits, News

China’s Haitong Bank has opened a lawsuit against Novobanco over irregularities in the sale of former Banco Espírito Santo Investments (BESI) in 2014 in a €380 million deal.

The Chinese banking group is accusing Novobanco of having omitted or hidden information regarding the real financial situation of some of BESI’s client companies, and for this reason is suing for €150 million according to Jornal Económico. Furthermore, the total legal suit could involve as much as €700 million.
The sale of BESI happened 10 years ago, but it is only now that the Chinese have been surprised by the difficult financial mess some BESI client companies were in, and that were mentioned just days before the sale contract was signed – a contract that stipulated that from thereon Haitong would take on all financial and economic responsibilities for BESI’s loan portfolio.
On 3 August 2014, the Bank of Portugal took control of BES in which it housed the worst of the toxic assets in what was termed the ‘bad bank’ and renamed the BES with the good or recoverable, albeit still problematic assets, as Novobanco, known as the ‘good bank’.
At the time BES was wound up, BESI was transferred to Novobanco. The case will be heard by an arbitration court in Paris with a final decision handed down within two years.