It was the simplest case of the five administrative offenses filed against Ricardo Salgado and turns out to be the second condemnatory administrative offense decision by Banco de Portugal (BdP) to become definitive – having already been published on the central bank’s website as mandated. the law. The former leader of BES will have to pay a fine of 75 thousand euros for having violated the rules imposed for the BdP and for providing fraudulent false information to the banking supervisor between October 2012 and March 2014.
After the condemnation of the Board of Directors of the BdP led by Carlos Costa in October 2019 for three intentional misdemeanors, the company Espirito Santo Finantial Group (the company of the Espírito Santo Group that held the stake in BES) did not appeal and conformed with the conviction of 110 thousand euros. Salgado and José Castella, a former GES controller also convicted, appealed to the Competition, Regulation and Supervision Court in Santarém.
José Castella died in March 2020, extinguishing his administrative offense.
The Competition, Regulation and Supervision Court fully confirmed the decision of Banco de Portugal against Ricardo Salgado on 16 July 2020 and just two months later did the Lisbon Court of Appeal.
The first BdP indictment to become final at the beginning of this year requires Ricardo Salgado to pay a fine of around EUR 3.7 million and not to exercise functions in corporate bodies of credit institutions and financial institutions in the next 8 years.
Ricardo Salgado’s first conviction about to become final
This lawsuit opened in 2014 is related to the alleged falsification of accounting by ESI – Espírito Santo International (one of the holdings control of the Espírito Santo Group) since 2008 and the alleged fraudulent debt issuance scheme in the amount of EUR 1.3 billion that was placed on BES customers. Salgado was accused of four more administrative offenses, having been fined in June 2016 by the BdP for the payment of a fine of 4 million euros and a 10-year disqualification from exercising functions in the financial sector for five administrative offenses: the practice of intentional acts of ruinous management, failure to implement an information and communication system with intent, failure to implement a management system for fraud. solid and effective risk, with intent, provision of false information and violation of the rules on conflict of interest.
Following an appeal, the Competition Court upheld the conviction in April 2018 but lowered the fine in legal cumulation to 3.7 million euros. Amílcar Morais Pires, Salgado’s right-hand man and former financial officer BES, was ordered to pay a fine of 350 thousand euros and was banned from exercising functions in the financial sector for a year.
There are three more BdP convictions against Ricardo Salgado and other former BES managers who are still pending in the courts of appeal.
BES’s exposure to the activity of Banco Espírito Santo de Angola (BESA), valued at more than 3 billion euros, led the BdP to order Ricardo Salgado to pay a fine of 1.8 million euros and other former directors of BES: Morais Pires (who had the international portfolio at BES) to a fine of 1.2 million euros, Rui Silveira to 400 thousand euros and 150 thousand euros to Gherardo Petracchini. The appeal is pending at the Santarém appeal court.
The second pending case concerns the lack of implementation of money laundering control mechanisms that all Portuguese banks were (and are) obliged to implement due to European Union rules at BESA and the branches and subsidiaries that BES held. in Angola, United States, Macau and Cape Verde. Ricardo Salgado was sentenced by the BdP to pay a fine of 350 thousand euros in this process, while Morais Pires was forced to pay a fine of 150 thousand euros and António Souto, former BES administrator, to pay a fine of 60 thousand euros .
Ricardo Salgado accused by Banco de Portugal of violating the rules in more than 2,856 credit operations to GES
However, after appealing the defenses, the Competition, Regulation and Supervision Court annulled the decision because all the defense guarantees given to the defendants in administrative administrative offenses were not fulfilled. After an annulment of the trial in the Santarém court for alleged breach of defense guarantees, successful appeals by the MP and BdP for the Lisbon Relations and a repeat trial, Salgado was eventually sentenced in early September 2020 to pay a a fine of 290 thousand euros and Morais Pires of 100 thousand euros.
Finally, the BdP’s last accusation against Ricardo Salgado took place in July 2018. The former BES leader was accused of allegedly performing malicious acts of ruinous management in the so-called Eurofin case, of violation of specific determinations ordered by the central bank (the failed ring fencing, namely) and the violation of credit granting rules to related parties. Salgado risks paying a fine of 4 million euros and a new inhibition to exercise functions in the financial sector during the next 10 years.
The days of Ricardo Salgado’s (pure) despair
Amílcar Morais Pires (former BES chief financial officer), José Manuel Espírito Santo (Salgado’s cousin and former BES director) and Isabel Almeida (former director of BES’s Finance, Markets and Studies Department) were also charged. BES and Espírito Santo Financial Group were accused as legal persons.
In this process, technicians from the BdP’s Department of Investigation and Sanctioning Action detected 2,856 credit operations that violated rules in granting credit to related parties. under which circumstances a total of EUR 1.2 billion of credit.
This is a process that has many points in common with the criminal prosecution that the Public Prosecutor filed in July 2020 against Ricardo Salgado, Morais Pires, José Manuel Espírito Santo and Isabel Almeida. Only Salgado was accused by the team led by prosecutor José Ranito of a crime of criminal association, 12 crimes of active corruption in the private sector, 29 crimes of qualified fraud, 7 crimes of money laundering, a crime of manipulation of the market, 6 crimes of infidelity and 9 crimes of document forgery.
The prosecution. Anatomy of a criminal association that destroyed the Espírito Santo Group