Court of Auditors criticizes lack of transparency in privatization … – publico

                 

                         
                     

                 

 
                         

In what is the first report of an analysis that is making the privatization procedures conducted since 2011, some of the main criticisms of the Court of Auditors (TdC) go into action Parpública. The holding that manages the business interests of the State and that was the executing agency of the privatization of EDP (completion of the 7th and 8th phase) and REN (2nd phase), which are appreciated in this first audit, it deserves repairs the lack of transparency on issues related to the selection of consultants for business.

                     

                         According to TB, these privatization processes (conducted between 2011 and 2013) had total charges of consulting approximately 28 million euros, of which 411 thousand euros relating to legal advice and the remainder relating to financial advice (including 50 thousand euros of evaluation of the companies and 27 million from the sale advice).

Complaining of difficulty in accessing some information and documents Parpública, the TB negatively underlines how the holding (now chaired by Pedro Ferreira Pinto, but the time of onset of privatization was directed by Joaquim de Oliveira Reis, and then by Joaquim Jorge Pais) managed conflicts of interests. It says that TB “Parpública did not ensure that financial consultants (whether for the prior assessment or advice during the sale process) stay prevented from subsequently advise potential investors, in that case, which came to pass with hiring . BESI in the process of (re) privatization of EDP and REN “

Not only the investment bank of the old BES provided services to the State as an evaluator, as was later buyers of financial advisor: China Tree Gorges, in the case of EDP, and the State Grid, REN buyer. “It appears, therefore, that Parpública has not taken the necessary precautions to avoid conflicts of interest, which is not in accordance (…) with the company’s experience,” says the TB.

The audit respect other situation related to financial advisors in the “action Parpública becomes subject to public censure.” The TB recalls that the economic and financial evaluations of REN and EDP fit to Millennium BCP, Caixa Banco de Investimento (CaixaBI) and BESI, entities that were already pre-selected for this purpose. But the remaining financial advisory work was carried out jointly by CaixaBI and the Perella, who was subcontracted by the investment bank CGD “with the tacit consent of Parpública without being included in the list of pre-qualified for financial assistance to privatization processes “.

The Court notes that the Parpública” could not, by act or omission, consent to subcontracting by a pre-qualified candidate from another entity that did not feature on the list. ” A subcontractor who acted “in interventional and autonomously (…) with the consent of Parpública” adds an underscore of TB.

And while, on the other party headquarters, the public holding company has been “claim that the participation of Perella was limited to mere auxiliary figure “under the Act, the Court recalls that Perella shared equitably with CaixaBI fees paid by Parpública for financial assistance (27 million).

The TdC still marks a “double standard” in the advisory selection process. Is that for the choice of evaluators and legal advisors were several entities invited to submit proposals, but for financial advice, “whose value was considerably higher than the first two” an entity has only been invited:. CaixaBI

The institution chaired by Guilherme d’Oliveira Martins goes further and says that the public holding highlights “lack of transparency” regarding the “hiring outside consultants associated with the privatization process”; accuses her of breaches the guidelines of the Treasury Directorate and Finance (DGFT) for technical consulting contract and also challenges the understanding of Parpública that is not subject to public procurement code (CCP) and who has not by it publish the contracts in the BASE website.

These sales generated a gross revenue of 3.2 billion euros, of which 2.7 billion were delivered by Parpública the state to public debt amortization , referred to TB. While considering privatization models and fittings “appropriate” and noted the positive impact of operations on regular troika assessments, the Court points out that, “in the interests of financial feasibility, timing tax” to achieve them accounted for State “an opportunity cost” because they were held in a “very negative economic environment”, it adds “the loss of future dividends annually distributed by these companies.”