Lisbon, Oct. 14, 2024 (Lusa) - The trial in the BES/GES case related to the collapse of Banco Espírito Santo and the business group of which it formed a part begins on Tuesday, with the former CEO of BES, Ricardo Salgado, facing accusations from the prosecution that he headed a criminal association, while the defence has been arguing that he is a vulnerable patient who should not go to court.
The first session is scheduled for 9.30 a.m. at Lisbon's Central Criminal Court, and the former head of the Espírito Santo Group (GES) is the main figure in the main case, facing 62 criminal charges, after three of the 65 counts that were on the initial charge sheet issued by the Public Prosecution Service having recently expired due to the statute of limitations - and with 10 more set to go the same way by the end of March 2025.
Salgado is charged with one offence of criminal association, 12 offences of bribery in the private sector, 29 offences of qualified fraud, five offences of infidelity, one offence of market manipulation, seven offences of money laundering and seven offences of document forgery, all of which are said to have been committed between 2009 and 2014, and for which he will have to answer to a panel of judges chaired by Helena Susano.
It was on 14 July 2020, following six years of investigation, that the office of Pottugal's sttorney general confirmed the fall from grace of the man who was once referred to as the ‘Dono Disto Tudo’ (Boss of All This). The Public Prosecution Service did not use this expression in the more than 4,000 pages of the charge sheet, but the idea permeates the entire text, stressing that he governed GES "in an autocratic manner" and that he was primarily responsible for the collapse of the group and the bank.
Salgado, it states, "was responsible for a governance structure for the financial part of GES based on a conflict of interests, in which his [interests] prevailed, and with inoperative oversight bodies, both external and internal, from whom he withheld basic information about the way he organised the banking business, and recruited a number of employees who were positioned for his criminal designs," say public prosecutors in the charge sheet.
For the prosecutors who investigated him, led by José Ranito (who since 2021 has been Portugal's nominee in the European Public Prosecutor's Office), Salgado "managed to appropriate the assets of third parties within the scope of the Group's financial business, where he circulated the debt of non-financial entities, regardless of their legitimacy to carry out this activity, or the patrimonial conditions of these companies."
According to prosecutors, the then CEO of BES masked the reality of the group by "systematically and successively producing false financial statements" that were disclosed to "shareholders, creditors, auditors of GES companies, national and foreign supervisors" - with a prime example being the falsified accounts of Espírito Santo International (ESI), the group's key holding company.
And this was only possible, according to the charge sheet, with the "existence of organised cells, with mastery of auditing matters, supervision, the banking circuit and the financial intermediation circuit for the deliberate commission of criminal acts, and all those related to preventing their detection and allowing their concealment in the normality of a particularly complex activity."
Since the charge sheet was issued, four years have passed and a long pre-trial 'instruction' phase has seen the charges against the former chairman of GES upheld by a separate judge. It was also during this period that Salgado's state of health deteriorated, with defence lawyers submitting successive reports containing a diagnos of Alzheimer's disease, as well as requests for neurological experts to be consulted.
Arguing that the 80-year-old former banker "is not in a position to personally exercise his defence" the lawyers Francisco Proença de Carvalho and Adriano Squilacce expressed the belief that "populism will not override the application of the law and the Constitution of the Portuguese Republic" and warned that "Portugal could be condemned by the European Court of Human Rights" if the trial of Salgado goes ahead.
"The present criminal proceedings against the defendant should be terminated due to his medical condition, which prevents him from personally exercising his right to defence," they stated. "If this does not happen, the present proceedings should be suspended in respect of the defendant for as long as his current medical condition persists. In any case, the defendant should be acquitted of all crimes."
The lawyers go further and state that, regardless of the health question, Salgado "did everything in his power to ensure that the outcome was not what happened in the summer of 2014" - when the Bank of Portugal wound up BES - arguing that the central bank was itself responsible for the collapse and that the ‘Dono Disto Tudo’ thesis was "an opportunistic narrative taken advantage of by many."
As well as dismissing all the crimes, Salgado's defence focuses on the accusation of criminal association to describe it as an "veritable fantasy" by the Public Prosecution Service, stressing that neither GES nor BES had the purpose of committing crimes.
"If there had been any resolution of criminal association from 2009 to 2014, the defendant would certainly not have risked and invested his personal assets in GES and BES," they observed.
The defence therefore argued that the history of BES/GES "cannot be reduced to a 'criminal association'” on Salgado's orders and that the prosecution's accusation of this crime is "scandalously unfounded". They also pointed to what they said were various legal holes in the prosecution case, arguing that the charges against the former banker are generic, denouncing a "handful of nothing".
The case, which is considered one of the biggest ever in the history of Portuguese justice, encompasses 242 separate criminal inquiries, which have been merged, and complaints from more than 300 people and companies based in Portugal and abroad. According to the Public Prosecution Service, the collapse of GES resulted in losses of more than €11.8 billion to the Portuguese state and to others.
JGO/ARO // ARO.
Lusa
