The Public Prosecutor's Office is on the case of Caixa Geral de Depósitos and suspects that senior managers of the State-owned bank have been fiddling the books for years to hide losses, despite these managers having just been cleared by MPs on a Commission of Inquiry.
The prosecutor claims that non-performing loans, a minimum of €1.4 billion has been mentioned, were classed as 'active' even though repayments had stopped with borrowers defaulting between 2007 and 2016.
This is a dramatically different conclusion than that reached by the Commission of Inquiry which blamed the bank’s financial ills on the recession.
The new suspicions arise as a result of a decision by the Court of Appeal in Lisbon which finally has decided that the Bank of Portugal must deliver the documents requested by MPs on the two Committees of Inquiry looking at Caixa Geral’s past management and loan history.
"The evidence already put forward sustains the suspicion that Caixa Geral was confronted with the need to register impairments that were largely due to the granting of credit, in violation of management rationale, in particular as regards the provision of guarantees or other losses, especially in the area of investment," reads the Court of Appeal’s judgment, signed by Judges Artur Vargues and Filipa Frias de Macedo.
If this massive and serious fiddle can be proved, and the Court of Appeal ruling to release the loan documents is a big step forward, events at Caixa Geral may be classed as 'misdemeanour crimes committed in the exercise of public functions' or just plain corruption - either way, we are getting closer to the truth.
It is now up to the Bank of Portugal to hand over the requested documents, even though it's governor previously has refused to do so, claiming ‘customer confidentiality.’
The Bank of Portugal’s governor, Carlos ‘Mr Magoo’ Costa, (pictured above) now has no reason left to withhold the key documents that everyone know will nail those at Caixa Geral who were granting ‘friends and family’ loans in violation of banking rules, unsecured and often, destined to fail.
The Ministry of Finance and the Stock Market Regulator have been backing the Bank of Portugal’s refusal to release these key loan documents - now they have no reason to continue especially if the mess and lies at Caixa Geral can be laid at Carlos Costa’s feet.
