“There had never been a discussion like the one in that meeting,” emphasized Rita Amaral Cabral, testifying at the main trial over the bankruptcy of Banco Espírito Santo (BES).
The focus is on the BES Board of Directors meeting held on July 30, 2014, just days before the bank’s resolution, at a time when the Bank of Portugal had already removed Ricardo Salgado from its leadership and required the financial institution to set aside at least two billion euros to cover potential losses from bonds exposed to the Espírito Santo Group (GES) crisis.
At the same time, the non-executive director recalled, there were already BES clients visiting counters to have the bank repurchase, at a loss, financial instruments it had sold, with requests being accepted to “avoid panic” among investors.
Rita Amaral Cabral specified that representatives from French Crédit Agricóle were the most opposed to the measure, which was supported by KPMG’s representative.
The latter believed that the fear of panic justified the creation of a two billion euro reserve, while the French bank argued it was unknown whether requests to repurchase bonds would become widespread.
With the provision, BES would no longer meet the required minimum capital levels.
Although sold at BES counters, the financial instruments were related to GES entities, whose collapse was then imminent.
According to Rita Amaral Cabral, months earlier, Ricardo Salgado had lamented that since the problems at BES and GES had become public, everyone was advising him on what he could or could not do in bank management.
The former BES president, aged 81 and suffering from Alzheimer’s, is one of the 18 defendants in the case, facing around 50 charges, including criminal association and several counts of active corruption in the private sector and qualified fraud.
The Public Prosecutor estimates that the alleged acts by the defendants between 2009 and 2014—former BES executives and other GES entities—caused losses of 11.8 billion euros to the bank and the group.
The trial has been ongoing since October 15, 2024, and will continue on June 30 at the Central Criminal Court of Lisbon, with the remaining testimony from Rita Amaral Cabral.
