Lisbon, Feb. 11, 2025 (Lusa) - Former Portuguese prime minister Pedro Passos Coelho said in court on Tuesday that, in May 2014, he suggested to then banker Ricardo Salgado that he negotiate an "orderly bankruptcy" with the creditors of the Espírito Santo Group (GES).
The head of government at the time of the resolution of Banco Espírito Santo (BES), in the summer of 2014, said that the recommendation was made after, in a meeting with Ricardo Salgado and two other members of the institution, they requested that the state implement a support programme for GES.
"That meeting reflected Ricardo Salgado's request to see the government, I won't say impose, but to give guidelines to (state-owned) Caixa Geral de Depósitos bank and, if necessary, give some positive input on a restructuring plan with other banks [...] for a financial support programme for the Espírito Santo Group,’ said Pedro Passos Coelho, testifying at the trial in the main case of the BES/GES collapse.
In addition to financial support, BES Bank's management wanted it to be possible to make "an exchange of assets", in order to manage those that could "be putting pressure on the group's financial health".
"My reaction was very practical: I told them that this plan had no viability whatsoever," he emphasised.
In this context, the then prime minister gave "a suggestion to avoid the disorderly bankruptcy of GES", proposing to Ricardo Salgado that he gather "its most relevant creditors" and negotiate "an orderly bankruptcy" with them.
Pedro Passos Coelho also recalled that, in April 2014, he had already had a first meeting with the former president of BES, in which he (Ricardo Salgado) had shown "discomfort with the way the governor of the Bank of Portugal was dealing with BES".
"It was known that the Bank of Portugal was committed to ensuring that BES's management was replaced, not to assist the confusion between the situation that was reasonably known about the Espírito Santo Group and that of the bank itself," he added.
The case currently has 18 defendants, including the former chairman of BES, Ricardo Salgado, who is 80 and has been diagnosed with Alzheimer's disease.
Ricardo Salgado is charged with around 60 offences, including one count of criminal association and several counts of active corruption in the private sector and qualified fraud.
The public prosecutor's office estimates that the acts allegedly carried out between 2009 and 2014 by the 18 defendants, former directors of BES and other GES entities, caused losses of €11.8 billion to the bank and the group.
This trial began on 30 October 2024.
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