The BES customers will have acquired stakes in financial vehicles that had debt of companies in the Espírito Santo Group – and the bank itself – hidden. Customers would not know what they were buying.
The Wall Street Journal has now written an article on the crisis in Espírito Santo Group and its effects on the crown jewel: Banco Espirito Santo. This time, the novelty is that the bank helped Credit Suisse gather billions of dollars in debt that may have played a role in the collapse in the bank.
The Swiss bank will have clustered securities issued by companies the Holy Spirit in financial vehicles that apparently were not related to him for having alleged headquarters in tax havens (the so-called “offshore”) Group. BES would own debt, the Angolan Escom and also the Espírito Santo Financial Group within such vehicles.
Then reassembled these products (containing corporate debt GES) were sold to customers of Banco BPI Holy Spirit. No they knew they had debt from group companies within these vehicles – ie, without knowing the risk of investments. This was a way for such companies to finance themselves.
There are no certainties, and join these securities, Credit Suisse may have had any role in the marketing of these securities to bank customers, according to the Wall Street Journal, citing anonymous sources and official documents related to the investigation surrounding the case. Neither Swiss institution or BES representatives declined comment for publication information.
According to the newspaper, there were four vehicles that were sold to customers BES. Something that is being investigated by Portuguese regulators. The results of the bank for the first six months of the year, reported four suspicious vehicles, consisting of obligations of the bank, although it does not confirm that you are talking about the same vehicle. In the results, the three vehicles had been discovered, still missing show the structure of one another.
Salgado wants distributing blame
Again, the Swiss company Eurofin, which was held by the Holy Spirit universe by 2009, is again referred to an article in the American publication. This time, because Eurofin have control, even if only a fraction of these vehicles. As has been written by the newspaper, the Portuguese regulators will have the suspicion that Eurofin have played a central role in the collapse of the BES. An information denied by that entity last week.
Escape the disclosure of deals
According to the WSJ investigation, the sale of preferred shares of these vehicles was made in limited amounts. There seems to be second publication, a reason for this: there is a reduced supply, in that there were few customers of branches they acquired such debt, was not required to issue a prospectus, which is pointed details and risks more intensely. Was concerned a private offering and not a public offering.
The sales have already occurred this year, and there were orders from the Bank of Portugal to the connection between BES and GES was limited, so reduce the bank’s exposure to that group. What the governor of the Bank of Portugal, Carlos Costa, has said he was not fulfilled.
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