There are moments we’ve been waiting for for decades. This Tuesday morning, nearly 1,700 people attended the start of the trial aimed at determining those responsible for the bankruptcy of Portugal’s largest private bank. For those who lost all their savings with the bankruptcy of Banco Espírito Santo (BES), justice has been too slow, but on Tuesday the trial began that put on the bench someone who for decades was considered the one of the most powerful in the country, Ricardo Salgado.
To realize the size of the Espírito Santo Group, owner of the bank of the same name, and the influence that the entity’s president, Ricardo Salgado, had, just look at the name under which the former banker was known in Portugal: “Owner of all this.
BES’ network of interests extended to political power, since the bank’s director frequently received politicians in his office with whom he exchanged favors or maintained cordial relations to ensure that he retained his influence in case of change in the political cycle. The BES Group was also known for its significant investments in the real estate sector, with a huge portfolio of properties and investments, and for its close links with the business world – BES had an unrivaled portfolio of clients and assets by other private banks. which operated in Portugal.
Far from the power he held for decades, Ricardo Salgado who reappears before the country this Tuesday is a weakened man and far from the image of “owner of everything” that he has nourished since he took the head of Banco Espírito Santo in 1991. After years in which he was rarely seen in public, Salgado suffered – according to the defense – from Alzheimer’s disease. On his first day in court, he was only able to answer when asked his name. All other questions remained unanswered.
The great defense battle of the former banker in recent years has been to request the suspension of the proceedings due to the advanced state of his illness, which would make him incapable of defending himself against the 62 offenses with which he is accused. – including fraud, documentary on corruption and lies. Salgado’s defense failed to achieve its goal and the trial began without anyone being able to specify how long it will last, given the magnitude of the case.
To show the country the state of health of Salgado – now 80 years old – the defense voluntarily left the former banker at the gates of the Lisbon Justice Campus, where the trial is taking place, so that the banker could make the short film. A 30 meter journey to the entrance to the court in front of the cameras of the various television channels which are concentrated there. Walking was too slow for the few meters I had to cover and was impossible without support. While leaving the courthouse, Salgado ended up driving out of the garage. Once identified, unable to answer the most basic questions due to his state of dementia, he was excused from appearing for the remainder of the trial.
In total, 18 defendants – including three companies – are sitting in the dock and have committed more than 300 crimes. Some of these crimes were statute barred due to the delay in the trial. The file contains more than 89,000 pages, organized into 215 volumes. All the defendants decided to remain silent on Tuesday.
More than a hundred victims died without getting their money back
In one of the last advertisements that the famous footballer Cristiano Ronaldo made for the bank – in 2010, already in the midst of a crisis whose scale was publicly unknown – he made a famous statement: “I don’t like to lose a cent . , that’s why my money is in BES. The bank that seemed safe was not. Since 2008, accounts have been falsified to hide debts, during successive loans within the sub-companies of the business group, using a series of financial mechanisms to hide the real situation of the bank. While before the crisis the liabilities amounted to 180 million euros, when the economic group went bankrupt, the bank had more than 3.5 billion euros in losses in the first half of 2014. As the crisis sovereign debts continued, the group’s financial hole became unsustainable. , dragging down the entire business empire built over decades.
On August 1, 2014, after announcing historic half-year losses of 3.5 billion euros, the BES lost half of its stock market value. Unable to demonstrate sufficient liquidity to operate normally, it set off alarm bells in the country and there was an avalanche of deposit withdrawals. It was a nervous weekend at the Bank of Portugal that only ended when, on Sunday August 3 at eleven o’clock in the evening, the governor of the Bank of Portugal at the time, Carlos Costa, announced to the country that the bank had been divided in two: one part, called the “bad bank”, kept the toxic assets, while the good part of the bank went to a new banking establishment which “was born” a few hours later with the two million of customers of the former Banco Espírito Saint.
BES stopped opening its branches as such: it was renamed “Novo Banco” (New Bank), a financial institution which continues to operate today and which has retained the employees and branches of the old BES. The difference is that since then the Portuguese state has put more than eight billion euros in the bank as a loan, but no one knows exactly when – the latest date is 2056 – and how they will be recovered, despite promises that the bankruptcy of the BES “would not cost Portuguese taxpayers anything”.
The vast majority of those affected – many of whom are Portuguese immigrants with little financial knowledge – have not yet managed to recover all their savings deposited in the bank. These are people who invested all their savings in term deposits with promising interest rates, in investments that they were guaranteed to be safe, but which were far from safe. In practice, for months, bank employees were responsible for selling “commercial paper” type investments to clients, which were nothing other than the debt of the bank and the Espírito Santo group, used to plug the financial hole in which the group found itself.
Among the victims, 104 have already died over the last decade without having recovered all the money they had entrusted to a bank they believed to be safe. In total, the victims are demanding around 5 billion euros from the bank. The court will also investigate criminal liabilities behind the bankruptcy of what was once Portugal’s largest private bank.
