PJ police searched the offices of national airline TAP on Friday as part of ongoing investigations into a “ruinous deal” in 2007 that effectively cost the government €500 million.
Under particular scrutiny is the payment of a 20% commission to a firm owned by Chinese business magnate Stanley Ho.
Ho – whose nickname is King of Gambling – has assets throughout the world, which include numerous casinos, including outlets in Lisbon and Estoril.
According to reports coming in on Friday afternoon following the ‘breaking news’ story by SIC television, this is the second time PJ police have searched TAP for evidence in this long-running inquiry that centres on the airline’s purchase of an engineering and maintenance company in Brazil.
Then called VEM – now renamed M&E – “one of the aspects of the deal under suspicion is the payment of a 20% commission to the firm Geo Capital”, led by Ho, Observador website explains.
In 2014, Diário Económico cited a report that suggested the “deal forged by TAP never had the approval of the then Treasury secretary Costa Pina”.
The idea behind it was to allow for maintenance and engineering of TAP planes in Brazil. But quite apart from the fact that VEM ran at a continual loss, there were ‘hidden aspects’ of the deal, which included the purchase of VEM’s Macau-based offshoot Varig,that saw TAP’s costs spiral.
A straight 22 million euro payout ballooned into 62 million, TAP chairman Fernando Pinto told Público in 2014. Then there was another million that went on lawyers’ costs and expenses followed by “the problem” – a clause that stipulated that if Varig went bust, which it did, TAP would be “obliged to acquire part of Geo Capital”, with the added expense of a commission of 20% to be paid.
“What happened obliged TAP to pay another €3.7 million to Geo Capital,” Observador adds.
VEM’s successive losses “aggravated this first problem”, leaving TAP in a €300 million financial mess that prompted privatisation negotiations which swung from pillar to post for years.
Reports say the investigations at TAP’s headquarters in Lisbon and the offices of government management holding company Parpública were led by the PJ’s anti corruption unit, in coordination with DCIAP, the department of penal investigation.
On Saturday, the news was updated with national tabloid Correio da Manhã suggesting that PJ police and the Public Ministry “believe the terrible deal was not innocent”.
Crimes of corruption, economic participation in business and money-laundering are suspected, added the paper – saying at the “centre of the investigation is (former transport and public works minister) Mário Lino and president of TAP, Fernando Pinto.
For now, no formal charges have been made.
Lino has previously been heard as a witness in police investigations, but it was not established whether he gave the green-light to the deal or not, said CM.
Meantime, PJ investigators are “collaborating with Brazilian justice” to “search for the trace of bribes”.