Authorities should have stepped in quicker over GES problems says banker – and refuses to discuss €100 million loan to ESI
Authorities should have stepped in quicker over GES problems says banker – and refuses to discuss €100 million loan to ESI
The Chairman of bank BPI, Fernando Ulrich, called the loss of €20Bn by the Banco Espírito Santo Group (GES) “extraordinary” at a court hearing into the financial mismanagement of the group which collapsed in 2014.
Fernando Ulrich took the stand as a witness before the collective of judges and the magistrate from the Public Prosecutor’s Office – as part of the BES case hearing – and began to criticise the trial.
“I would ask you to answer the questions. The relevance or not must be assessed by the court,” rebuffed Judge Helena Susano.
Fernando Ulrich, then executive president of BPI, argued that the authorities should have acted earlier in the face of problems at GES.
Ulrich in particular targeted the Securities Market Commission (CMVM), the Bank of Portugal (BdP) and the Government, adding that they should have stepped in as early as 2012, in order to try to avoid the group’s failure two years later.
Ulrich spoke about BES’s successive capital increases, with the MP magistrate wondering if, from Fernando Ulrich’s perspective, the successive capital increases that BES made were “a sign of vitality”.
“If we consider the beginning of 2013 and look at the period between 2000 and 2012 — this was an analysis we used to do. The issue of the banks’ reputation was a high priority and I, in the presentation of results, always presented a slide in which the title was‘ banks are not all the same’ and one of the tables showed the amount of capital increases from the main banks and the amount of dividends distributed”, said Ulrich.
And what you see is that CGD, BCP and BES made more capital increases than they paid dividends,” he replied.
“What does what you are asking me matter when €18Bn have been thrown down the pan?”, the chairman of BPI also asked referring to the colossal amounts forked out by the State, the tax payer, the banking sector and the Resolution Fund in the wake of the BES collapse.
The magistrate continued to ask about BPI’s loan relationships to Espírito Santo International (ESI), but Fernando Ulrich criticised the Public Prosecutor’s Office again: “This way we will never get anywhere. This is so monstrous”.
“What does your question matter [a €100 million loan from BPI] when they went through €18Bn?”, he said.
The answer is yes, but what’s the point?”he asked. He also said: “ It is not me who is in the dock, nor BPI. Why are you asking this question?”
The Public Prosecutor’s Office pressed Ulrich for more details about the links between BPI and GES companies but Fernando Ulrich immediately warned that he would not answer some questions: “Tomorrow, I will file a case for violation of bank secrecy”.
The conversation he had with the then governor of Banco de Portugal, Carlos Costa, in 2013 was also mentioned by the chairman, stressing that what “worried him was the consequences that this situation with GES could have on BES and that this would generate a systemic (banking sector) problem” and that it would put everyone “in danger as was the case”. “They blew over €20Bn! This is an extraordinary thing,” he said.
Ricardo Salgado is accused of 62 crimes, allegedly committed between 2009 and 2014, including criminal association, active corruption in the private sector, qualified fraud, infidelity, market manipulation, money laundering and forgery. The fall of GES caused losses of more than €11.8Bn.
The case continues…
Image: MÁRIO CRUZ/LUSA
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