The former head of Portugal’s Banco Espirito Santo, Ricardo Salgado,
was put under house arrest on Friday after being questioned by a magistrate
over his role in the bank’s collapse, his lawyer said. Francisco Proenca de Carvalho called the
measure “disproportionate” in remarks to the press after the 12-hour
questioning. On Monday the former banker
was questioned by the state prosecutor, who decided to send him for further
questioning in front of an investigating magistrate. The prosecutor referred in particular to
suspicion of forgery, breach of trust, tax evasion and money laundering, in a
statement released on Friday. Portugal uses EU bailout cash to shore up
troubled Banco EspĂrito Santo. Once one of Portugal’s largest lenders, BES collapsed after reporting a
record loss last year and its three holding companies declared themselves
insolvent, facing allegations of accounting fraud. The bank’s woes threatened to drag down
Portugal’s economy, which had only gingerly emerged from a three-year bailout,
prompting the government and the European Union to swiftly come to the rescue. The
assets of the ailing bank were transferred into Novo Banco as part of a €4.9
billion (US$5.4 billion) bailout of BES, including €3.9 billion from the
government. For a year numerous
enquiries have been opened by the Portuguese authorities to determine who is
responsible for the scandal. Salgado
was forced out as head of BES after 23 years in June 2014 amid allegations of
accounting irregularities at one of the bank’s Luxembourg-based holding
companies. Banco Espirito Santo
shareholders seek explanation At a
parliamentary session in December, Salgado denied “having given instructions”
to falsify the BES accounts. But the
Bank of Portugal has since started a series of proceedings against most BES
executives, including its former chief, suspected of “malicious acts” and
“ruinous management”. The authorities
have also seized property belonging to the Espirito Santo family, Portugal’s
last banking dynasty, and its financiers.
The questioning of Salgado comes a year to the day after his arrest in
connection with another financial matter, where he was indicted for money
laundering before being released on bail of €3 million.
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