Shares in high street bank BES dropped a further 10% today after news reached the market that the bank's keenly awaited Annual General Meeting has been called off due to pressure from Espirito Santo Financial Group and Crédit Agricole, the bank's two largest shareholders.
The AGM was scheduled for Thursday July 31st and, according to a document sent to the market regulator CMVM, the meeting was called off due to, “incidental and unexpected facts” mainly the application to the Commercial Court of Luxemboug for protection from creditors for three key Espirito Santo companies to which BES is exposed.
Shares in Banco Espírito Santo ended the day's session down 10.60% following the news which, “has no bearing on the current management team, led by Vítor Bento, who was co-opted.”
BES has lost around €3 billion in value so far and an increasingly out of touch Bank of Portugal took the opportunity today to restate that BES is solvent and its shareholders are available to support a capital increase, if necessary.
This may not be the case as without help, Espírito Santo Financial Group is in no position to inject money into the high street lender, leaving Crédit Agricole carying much of the can should there be another rights issue.
The main item on the AGM agenda is an amendment to the company by-laws to create a strategic council that would constitute elements of the Espírito Santo family and Crédit Agricole representatives, in addition to the validation of the new BES leader, Vítor Bento.
The prospect of any family members representing the interests of shareholders in any of the Espírito Santo companies is becoming less palatable as time goes by as the extent of their mismanagement, and the revelation of €10 million in loans to family members, is released to an unsurprised public.
