BES victims’ warning over new letter sent out by Novo Banco

Novo Banco is reported to be sending letters out to the hundreds of small investors caught out in the BES banking debacle, telling them that they have until the end of the month to “reclaim credits” from various banking subsidiaries based in Luxembourg.

The investors – all of whom bought commercial paper issued by the disintegrating Espírito Santo empire – are being told they can lodge their bids if they were owed by ESI (Espírito Santo International), ESFG (Espírito Santo Financial Group), ESFIL or Rioforte.

But Ricardo Angelo of the association of ‘damaged and indignant’ commercial paper holders has warned everyone receiving a letter “not to sign anything”.

He claims the letters have been sent out to undermine the whole struggle for compensation.

“We would be assuming that these entities were the ones that should reimburse us,” he explained – pointing out that every single one of the companies has been declared insolvent.

Instead, the onus remains on Novo Banco, he stressed – the “good bank” that escaped the financial collapse and which now stands faced with demands from over 2,500 savers to be compensated for varying amounts in excess of €550 million.

As Financial Times journalist Peter Wise wrote over the weekend, the ‘victims’ of this aspect of the BES collapse are predominantly “middle-aged, middle class” people – many of whom have lost their life savings, been forced to close small businesses and/or are struggling to support elderly relatives.

They are all united in the feeling that BES account managers “tricked them into buying commercial paper by leading them to believe they were putting their money into safe investments”.

The ‘lie’ was further compounded by the fact that the governor of the Bank of Portugal repeatedly assured the country that all was well within the banking empire (see:

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