The president of Caixa Geral de Depósitos, António Domingues, and six members of his newly formed board have resigned as they remained unwilling to lodge their personal income and asset declarations, as is normal for those in significant positions in State-owned companies.
A formal notice today was received by the Securities Market Commission (CMVM), leaving the Finance Minister’s reputation badly damaged.
Portugal’s Prime Minister, António Costa, announced on Monday that he 'regrets the decision' by Domingues and that the government shortly will present the European Central Bank with a new name to take over the presidency of Caixa Geral - one who will assemble a new board.
Commenting about the refusal from Domingues and his fellow board members to follow the rules, the PM commented, "In a democratic regime, we all have to respect the legislation approved by the Assembly of the Republic, even when we do not agree with it. Now what is essential is that the bank quickly gets a new board.”
A spokesman for the CDS-PP, João Almeida, accused the Socialist government and prime minister of "incompetence and irresponsibility" in the management of the Caixa Geral situation after hearing of the resignations on Sunday.
The President of the Republic of Portugal, Marcelo Rebelo de Sousa, put on a brave face and commented wearily that "people change but strong institutions remain," earlier arguing that the stability of the financial system should be “a national priority.” These resignations are a big let down and puts Caixa Geral's expected recovery further from reality.
The Finance Minister, Mário Centeno, had picked the new Caixa Geral board with Domingues and has spent much time and effort in persuading parliament and the press that this was the 'dream team' that would lead the State-owned bank from its current position of near-bankruptcy to the sunlit uplands of recapitalisation and profitability.
António Domingues proved early on the he was exactly the wrong person to lead Caixa Geral’s recovery as he stubbornly refused to submit his income and asset statement.
Having managed to negotiate a much increased salary for himself and his fellow directors, Domingues went a step too far in insisting he should be treated like a public sector banker rather than displaying the sensitivity needed to head a State enterprise.
There was a vote in parliament last Friday that condemned the impasse at Caixa Geral, a vote that left Domingues feeling ‘offended,’ hence his resignation this weekend was no surprise as without the backing of parliament, clearly he could not continue to lead a State bank.
Whether the Finance Minister José Pacheco will follow Domingues and resign, or be sacked, remains to be seen, much depends on whether it can be proved whether Centeno did in fact offer Domingues a ‘no disclosure’ deal that would exempt the board from submitting their income and asset declarations. Either way, this is a mess.
