Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Portugal
  4. Euronext Lisbonne
  5. BANCO ESPIRITO SANTO
  6. News
  7. Summary
       PTBES0AM0007

BANCO ESPIRITO SANTO

SummaryNewsCompany 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Luxembourg launches probe into Espirito Santo holding companies

06/27/2014 | 02:29pm EDT
A man has his shoes shined near an office of Portuguese bank Banco Espirito Santo in Lisbon

BRUSSELS/LISBON (Reuters) - Luxembourg's justice authorities have begun an investigation into three holding companies of Portugal's Espirito Santo banking family, the biggest shareholder in Portugal's largest listed bank which bears their name.

A spokesman for the Luxembourg authorities said the investigation was launched on May 22 over alleged breaches of company law by the three Luxembourg-registered firms. He declined to give any further details about the investigation.

"The judge is investigating this now and during this time no further statements can be made," the judicial spokesman said.

Shares of Banco Espirito Santo (BES) (>> BANCO ESPIRITO SANTO) and ESFG <ESF.LS> - the only listed holding company of the three - as well as Portugal Telecom (>> PORTUGAL TELECOM), which acknowledged it had bought debt from another family holding company, fell on Friday.

Meanwhile, Finance Minister Maria Luis Albuquerque said the bank was well-capitalised and the government saw no threat to financial stability and public accounts.

"The government has no information that would lead us to believe that we have potential financial instability problems, despite a lot of noise," she told a parliamentary committee.

The three Luxembourg registered companies targeted by authorities there - Espirito Santo International SA, Espirito Santo Control SA and Espirito Santo Financial Group SA (ESFG) - are all part of a cascading ownership structure.

BES had warned last month of "material irregularities" at one of the companies, Espirito Santo International.

Nobody was immediately available to comment at the companies when contacted by Reuters.

BES, controlled by the Espirito Santo family before a rights issue this month, is also the largest shareholder in Portugal Telecom (>> PORTUGAL TELECOM), with a 10 percent stake. In turn, Portugal Telecom holds about 2 percent of Banco Espirito Santo.

Shares in Portugal Telecom fell 5.6 percent. The company said it had bought 900 million euros in commercial paper issued by RioForte, another holding company of the Espirito Santo family.

POSSIBLE SCRUTINY

Portugal Telecom subsequently merged with Brazil's Oi <OIBR3.SA>.

Analysts at Banco BPI said in a note: "Given the irregularities found at Espirito Santo International which holds 100 percent of RioForte, the difficulties the Espirito Santo Group faces to refinance itself and the controversy around BES and the group's holdings, we see reputational risks for PT/Oi".

Oi shares in Brazil (>> Oi SA) were down 5.2 percent.

"PT could ... get itself into possible scrutiny by regulators," Albino Oliveira, an analyst at Fincor brokers in Lisbon, said. A PT spokesman said the paper had been bought at an attractive rate and "bearing in mind our good experience of treasury investments in Banco Espirito Santo", but declined further comment.

Banco Espirito Santo shares fell 11.4 percent. The far less liquid shares in ESFG slumped 18.5 percent.

BES had warned of irregularities at Espirito Santo International (ESI) before its rights issue in May, citing reputational risks because the bank had sold commercial paper issued by ESI through its branch network to retail investors.

BES's share issue nevertheless drew strong demand.

The finance minister said the capital increase had contributed to financial stability and the bank had "a robust capital ratio", while the debt sold was covered by the bank's financial guarantees, which eliminates the risk of non-payment.BES shares have been hit in the past week by signs of discord within the founding family that add to uncertainties about whether regulators and shareholders will accept a new CEO and governance plan as proposed by BES's main shareholder.

CEO Ricardo Espirito Santo Salgado agreed a week ago to step down and to be replaced by his chief financial officer.

Ratings agency Moody's on Thursday placed BES's Ba3 credit rating on review for downgrade, citing corporate governance concerns.

(Reporting by Robert-Jan Bartunek, Andrei Khalip, Filipa Lima and Daniel Alvarenga Editing by Jane Merriman and David Holmes)

By Robert-Jan Bartunek and Andrei Khalip


© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRAZILIAN REAL (EUR/BRL) -0.28% 6.3173 Delayed Quote.0.87%
LETS HOLDINGS GROUP CO., LTD. 1.93% 6.34 End-of-day quote.-18.51%
OI S.A. 3.11% 1.66 End-of-day quote.-41.13%
THE LEAD CO., INC. 1.44% 704 End-of-day quote.-16.19%
All news about BANCO ESPIRITO SANTO
05/13Banco Espírito Santo, S.A. Reports Earnings Results for the Full Year Ended December 31..
CI
2019BANESCO USA COMPLETED THE ACQUISITIO : Bkes.f).
CI
2019BANESCO USA ENTERED INTO AN AGREEMEN : Bkes.f)
CI
2019JOSEPH BENHAMOU AND CERTAIN MEMBERS : Bkes.f).
CI
2018SARRIÓN FAMILY ACQUIRED AN ADDITIONA : Bkes.f).
CI
2018JOSEPH BENHAMOU AND CERTAIN MEMBERS : Bkes.f).
CI
2017BENACERRAF FAMILY, COHEN FAMILY AND : Bkes.f).
CI
2016Bank of Portugal resumes Novo Banco sale after bond transfer
RE
2015BANCO ESPIRITO SANTO : Release about balance sheet as at 31 december 2014
PU
2015Portugal regulator suspends trading in Novo Banco debt
RE
More news
Analyst Recommendations on BANCO ESPIRITO SANTO
More recommendations
Managers and Directors
Ana Mendes Martins Secretary