Goldman Sachs limbers up for €706 million court battle with Bank of Portugal

Multinational investment firm Goldman Sachs is limbering up for major court battle with the Bank of Portugal over the 835 million dollar (€706 million) loan that was left in the ‘bad bank’ after the BES carve-up.

Goldman Sachs promise to “immediately action all legal mechanisms” as they claim they were promised the loan – conceded to BES by its intermediary Oak Finance – would be transferred to Novo Banco.

As revealed by the Resident in December (see: https://www.portugalresident.com/novo-banco-in-eye-of-new-%E2%82%AC580-million-storm), Goldman Sachs has more or less accused the Bank of Portugal of a crafty case of double dealing.

If the Bank’s governor Carlos Costa authorised transfer of the loan to Novo Banco, the latter would hugely be compromised when it comes to its sale – and the Bank is desperate to sell Novo Banco as Portugal’s major banks paid millions into the fund that created it.

Thus Costa is prepared to sit it out. A statement put out by the Bank of Portugal this week said: “Any doubts that remain can only be clarified in court as the Bank of Portugal cannot … permit a transfer (of the loan to Novo Banco) … because of the serious risk that it would cause irreparable damage to the public interest.”