As every day brings new horrors to the fore, it now seems certain that small investors who put money into BES’ ‘products’ may have had their money used for entirely different purposes.
According to Diário Económico, judicial and supervisory authorities “are investigating suspicions of infidelity, falsification of documents and abuse of confidence in relation to the management of client accounts at the old Banco Espírito Santo”.
And as the investigations continue, the Resident offices received a reader’s letter warning others to be on the alert.
“My wife and I bank with BES,” read the letter. “We invested in their product ‘Gestão de Carteiras’ or ‘GDC’.
“One such product matured earlier this month and we were told by the local branch that the maturity proceeds would be automatically credited to our current account the next day.
“Unfortunately this did not happen and, to cut a long story short, we discovered the proceeds have been blocked by the Bank of Portugal, which is in discussion with BES as to how all GDC investments should be handled following the collapse of the bank last month.
“The net outcome is that we don’t know how much of our investment will be returned to us or even when.”
As the reader points out: “If any of your readers have a similar type of investment with BES which, on maturity, has already been earmarked for a specific item of expenditure, they might need to consider an alternative source sooner rather than later in case the situation between the Bank of Portugal and BES takes a long time to resolve.”
For the time being, Diário Económico writes that it has not been able to confirm whether this apparent GDC scam is what BES’ auditors KPMG flagged back in July when they discovered the Espírito Santo group of companies (GES) was being kept afloat by money from BES clients.
Meetings between investigators and bank regulators are currently ongoing in a bid to plumb the depths of the intrigue.
The public prosecutor has opened three separate inquiries into the management of GES, while the forensic audit of BES is still attempting to nail down individual responsibilities for the debacle.
Meantime, in Estoril, the former head of the bank, Ricardo Espírito Santo Salgado, continues to “receive economists and business managers” as he is reported to be putting together a shock for the government.
The government, in turn, is getting some very bad press, with opinion polls showing the majority of Portuguese distrust its performance, and question its assurances that the €4.9 billion bailout will not affect the man-in-the-street.
Judging from our reader’s letter, it already has and may continue to do so for quite some time.
