Group of 23 BES commercial paper victims fight for full loan recovery

A group of 23 victims of the Banco Espirito Santo (BES) commercial paper who did not accept the agreed solution guarantee that they will continue to fight to recover all their loans and now want to be accepted by the new government.

“We do not want to have anything to do with the courts, because it gives zero results. We have constantly informed all the parliamentary groups, the Presidency of the Republic and the Government about everything that happened and about the betrayal that was the solution,” he said. He said this on Wednesday to Jorge Novo, one of the injured parties, in a conversation with the Lusa agency the day after another audience with the President of the Republic.

According to Jorge Novo, this was already the “sixth or seventh” meeting with Marcelo Rebelo de Sousa, to whom the group this time gave additional details of their “10-year struggle” and the decision that “was imposed on them.”

The next step will be to schedule a meeting with Prime Minister Luis Montenegro: “I am going to ask for a meeting with the Prime Minister of Montenegro today so that he can resolve our situation, because this is enough. This is a political issue,” he stressed.

Jorge Novo is part of a group of 23 people who did not accept the solution found for the 2,100 victims of BES commercial paper, which included the creation in 2017 of a credit recovery fund that allowed for the return of 75% of investments up to 500 thousand euros (maximum 250 thousand euros) and 50% of investments above 500 thousand euros.

“I didn’t sign that agreement because to me it was a scam,” he told Luce, explaining that he could never accept the “waiver” it contained and accusing those responsible for drafting the agreement, namely the lawyers, of being interested only in “solving their own problem” and getting “fees and commissions.”

“It was all a negotiation, a solution developed in a working group led by Diogo Lacerda Machado – it is necessary to highlight this name, who is a friend of António Costa,” he added.

“I want all my money in full,” he concluded.

BES disappeared 10 years ago, and the news broke with a bang on Sunday, August 3, 2014, despite a series of scandals involving the group and leading to sharp criticism of the Bank of Portugal (BdP) for its delays.

On the day of the bank’s bailout, the BdP said shareholders and holders of subordinated debt would suffer losses because they would remain in BES (which had become a “bad bank”) rather than in Novo Banco (which was created that day primarily to protect deposits).

The holders of BES’s unsubordinated bonds also suffered losses. Initially, Novo Banco assumed responsibility for this debt, but at the end of December 2015, given Novo Banco’s lack of capital (not least because many of its remaining assets were ultimately “toxic”, such as non-performing loans), the BDP decided to return this debt to the “bad bank”.

The solution found for those affected by the commercial papers did not take into account the clients of the foreign branches of BES (in the case of emigrants from Venezuela and South Africa) and Banco Privée (Switzerland), which are still in negotiations with the current government.

Novo Banco also entered into commercial settlement agreements with affected emigrants.

According to Lusa’s calculations, the BES bailout has cost the state treasury around eight million euros so far, mainly as a result of the initial capitalisation of Novo Banco (the transition bank created on the same day as the BES sanction) and the recapitalisation carried out by the Resolution Fund.

Ten years after the fall of BES, the main criminal case against Ricardo Salgado, who led BES and the Espírito Santo Group for more than 20 years and is accused of 65 crimes, is expected to begin on October 15.