The former head of legal services at Banco Espírito Santo, Rui Silveira, said in court on Monday that BES depositors were covered because the bank left provisions to reimburse everyone.
The lawyer coordinated the Legal Department of BES and advised the Board of Directors between 1992 and 2000. He then advised the board of directors until the bank went bust in August 2014.
Silveira concurred with the testimony of bank chief, Ricardo Salgado, who is challenging charges of mismanagement brought by the Bank of Portugal, and said there was plenty put aside to cover customer investment losses.
“BES left €558.5 million in provisions to reimburse all customers. The money for the repayments went to Novo Banco, which did not pay up."
As for the bank's collapse, Rui Silveira said that the Governor of the Bank of Portugal, Carlos Costa, in early July 2014 sent a letter to Finance Minister Maria Luís Albuquerque and gave his "vision of the extraordinary work that BES was doing," while assuring her ensuring that the solvency of the bank was "robust" and that she could be "absolutely calm."
“...nothing was done at BES without the knowledge and authorisation of the governor of the Bank of Portugal,” said Silveira, stating that in 2014, the Bank of Portugal decided to withdraw all members of the Espírito Santo family from BES's board of directors, with Ricardo Salgado remaining as Chairman of the Advisory Board. This sent a dire message to the market and the share price plunged.
When Vítor Bento was chosen as the new bank chief, "the forest was already on fire," said Silveira, accusing the Bank of Portugal of adding "gasoline to the fire" by imposing provisions of €2 billion, on July 30, "against international standards."
This particular case is being heard by the Court of Competition, Regulation and Supervision, in Santarém, with Silveira batting for Salgado who is contesting a €4 million fine for misconduct, issued by the Bank of Portugal.
Rui Silveira, former head of legal services at BES
