A group of heavy-weight international investment fund managers, including Pimco and Blackrock, have demanded that the governor of the Banco de Portugal be called to Portugal’s parliament.They want an explanation of why he lied to them and transfered senior bonds from Novo Banco, back to ‘bad bank’ BES in December 2015, losing their investors €2.2 billion.
In a letter sent to parliament on March 6th, the international asset managers and investors challenge the Bank of Portugal’s decision to transfer subordinated bonds, especially when the governor, Carlos ‘Mr Magoo’ Costa (pictured) assured them that their funds would remain safely with Novo Banco.
In a letter sent to parliament on March 6th, the international asset managers and investors challenge the Bank of Portugal’s decision to transfer subordinated bonds, especially when the governor, Carlos ‘Mr Magoo’ Costa (pictured) assured them that their funds would remain safely with Novo Banco.
The international investment managers claim that "they were severely affected by the decision taken by the Bank of Portugal on December 29, 2015 after in which it intended to retransfer certain senior bonds from Novo Banco to BES."
The letter is sent by Attestor Capital, BlackRock, CQS and Pimco, who coordinate a wider group of international investors, all of whom accuse the Bank of Portugal of having "violently violated legal provisions and fundamental legal principles of Portuguese and European Union Law and for being discriminatory and arbitrary."
The investment managers say that a hearing, "is essential to make evident the true extent of the damages caused by the decision," both for the public treasury and for Portuguese taxpayers.
This group of investors claims to be available "to continue working with the Portuguese authorities to restore confidence in the Portuguese market, which has been so deeply affected by the actions of the Bank of Portugal."
Believing that "this trust will only be restored through transparency and dialogue with the Portuguese authorities and that the Bank of Portugal has made itself unavailable."
The same investors warn that "more important than discussing the illegal nature of Bank of Portugal's operations, which will be confirmed elsewhere, we would like to point out that the decision of the Bank of Portugal, which expressly discriminated against qualified investors, has been particularly damaging and has had adverse effects on Portugal - which, moreover, persist."
In addition to the losses directly caused by Carlos Costa’s actions, it has been the Portuguese taxpayers who effectively supported the financial impact of the retransfer decision."
A court case is pending at the Lisbon Administrative Court, the parties are awaiting a trial date, where they aim to prove that the retransfer decision was illegal and invalid.
In addition, "some 40 other lawsuits with a similar purpose have been brought by other holders of the senior bonds, including, to the best of our knowledge, a lawsuit filed by a group of 106 individual holders of these senior liabilities."
