Portuguese prosecutors have accused the former head of the Espírito Santo group of fraud and money laundering as part of their investigation into the collapse of the country’s oldest banking dynasty.
Ricardo Espírito Santo Salgado, who was chief executive of Banco Espírito Santo (BES) between 1991 and 2014, is accused of 65 offences, according to a 4,100-page document from state prosecutors that was reported in the Portuguese media on Wednesday.
Lawyers for Mr Salgado said in statement he had been notified of the allegations, which, according to the reports, include money laundering, market manipulation and corruption. The document “falsified the history of Banco Espírito Santo”, Mr Salgado’s lawyers said, adding that the former chief had “not committed any crime”.
Mr Salgado is accused alongside 17 other individuals, according to the reported document. In it, prosecutors allege that the former patriarch of the banking dynasty committed the offences in an effort to shore up the family’s tottering business empire in the wake of the financial crisis.
In a statement late on Tuesday, the public prosecutor’s office said that the Espírito Santo investigation involved more than 240 separate inquiries across several countries in response to complaints made by more than 300 individuals and companies.
Its investigation had concluded that the cost of the alleged crimes and damages related to them totalled “more than €11.8bn”, prosecutors said in the statement that did not detail the specific accusations.
Fearing the failure of BES, then Portugal’s largest listed lender, the central bank removed Mr Salgado as chief in July 2014 and weeks later split BES into a “bad” bank to be wound down and a “good” bank, renamed Novo Banco to maintain its core operations.
Mr Salgado’s lawyers said in their statement that the former chief considered this resolution to have been a “colossal error” that had caused “unquantifiable damage” to Portugal.
“The ‘political’ decision for the resolution turned a bank with 140 years of history, 2m customers and a 20 per cent market share . . . into a guinea pig for a unique experiment in Europe,” Mr Salgado’s lawyers said.
The filing of a formal accusation opens the way for the case to go to trial, pending a judge’s decision. A final court decision, however, is unlikely to be reached for several years, according to legal experts.
The Espírito Santo case is one of several large-scale corruption investigations under way in Portugal in which Mr Salgado is a suspect. These include a wide-ranging probe into suspected bribery and other crimes involving José Sócrates, the former prime minister, and alleged corruption at Energias de Portugal, the power utility. Mr Salgado, Mr Sócrates and EDP deny any wrongdoing.
The central bank has already banned Mr Salgado from working as a banker and fined him €3.7m for “ruinous management” and other illicit acts.
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