Carlos Costa is heard today in the new commission of inquiry to CGD – O Jornal Económico

Carlos Costa is heard today in the new commission of inquiry to CGD - O Jornal Económico


The Governor of the Banco de Portugal (BdP) will be heard on Wednesday, March 27, at the II Parliamentary Inquiry Commission (CPI) on the Recapitalization of Caixa Geral de Depósitos (CGD) and Bank Management, created after the disclosure of the audit report of EY to the management of the Caixa between 2000 and 2015, which concluded for losses of 1,647 million euros in 186 credit operations that turned out to be ruinous.

It is on these results that the new CPI will hear today Carlos Costa as regulator, since this one should be called to the Parliament also in the condition of ex- administrator of CGD (between 2004 and 2006). It is the second hearing of the new CPI to Caixa, after yesterday the auditor EY marked the start of the hearings in the new parliamentary committee of inquiry to the public bank.

Recently, the Bloque de Esquerda advised the Government to exonerate the governor of the Bank of Portugal, arguing that "without being able to assess its suitability in the face of the proven involvement in Caixa Geral de Depósitos, Carlos Costa does not fulfill the conditions of scrutiny and exemption for the performance of the functions of governor of the Bank of Portugal ".

The request came after the Jornal Economico revealed on 8 February that the examination of the suitability of former CGD managers, which is being carried out by Banco de Portugal (BdP), will leave out the governor of the Portuguese central bank that was also the administrator of the public bank between 2004 and 2006 – when credits were granted to entrepreneurs Joe Berardo and Manuel Fino, among others such as Vale do Lobo, which resulted in losses of 161 million euros.

This exam is being done seven ex-administrators of the public bank, among the 44 managers who have gone through CGD, to ascertain any liabilities in the management acts that have resulted in high losses to the public bank and is being carried out based on the findings of the audit of EY. The purpose of the examination in question is to verify the liability of each ex-manager of the public bank in the decision-making process and the areas of responsibility for which he was responsible.

Following the news from Jornal Econômico and the Saturday magazine that reported that Carlos Costa was in at least four meetings of the extended board of credit in which loans to debtors were approved, which resulted in high losses for the public bank, the Governor of the Bank of Portugal revealed in a statement that he asked not to participate in the decisions of the entity that heads the audit carried out by EY to 15 years of management of Caixa. This document reveals that the state bank ceded credits even in the face of unfavorable opinions from CGD's Risk Division.

On February 19, in an interview with SIC, Carlos Costa explained why he claims that he had no decision power in the ruinous credits given by CGD to Vale do Lobo and businessman Manuel Fino.

In the first case, the former CGD administrator assumes that he was in a meeting where the administration reached agreement in principle on what would be done if the enterprise was sold by the then shareholder, but assured that it was neither the final decision nor binding. According to the governor, the business in which CGD later participated had "nothing to do" with what was decided in that first meeting. Regarding the credits to businessman Manuel Fino, Carlos Costa denied that he was part of the meetings that decided to grant this loan.

Top 25 of the most ruinous credits resulted in losses of 1,263 million

According to EY 's Top 25 audit of the most ruinous credits, for a total of 1,263 million euros, between 2000 and 2007, 78% of these operations were concentrated: 871 million euros of losses recorded in 2015, that the management of Carlos Santos Ferreira (between 2005 and 2008) is pointed out with a greater concentration of ruinous credits, such as Artlant, Joe Berardo and Vale do Lobo.

The second CPI starts on Tuesday, March 26 with the hearing of audit EY. The next two days, 27 and 28, will be followed, respectively, by the hearings of the current governor of the Bank of Portugal, Carlos Costa, and the former, Vítor Constâncio.

In addition to the hearings to EY, Carlos Costa and Vítor Constâncio, the former Caixa Geral Statutory Auditor, Oliveira Rego & Associados, has already been approved, to the former head of Caixa's auditing department, Eduardo Paz Ferreira, to the previous one chairman of the Board of Auditors of the Bank of Portugal, João da Costa Pinto, and João Dias Garcia, former secretary of CGD's general meeting.

The list of names proposed by PS, PSD, CDS, BE and PCP includes regulators, auditors, former presidents, bank administrators and directors, supervisory bodies, politicians and large debtors such as Manuel Fino da Investifino and Joe Berardo of the Berardo Foundation.

The parties also want to hear former directors including Carlos Santos Ferreira and Armando Vara (2005 to 2008), Celeste Cardona (2004 to 2008), Almerindo Marques (2000 to 2002) and Carlos Costa (2004 to 2006), who will also be heard in his capacity as Governor of the Banco de Portugal.

Following the controversy surrounding an audit of CGD's lending between 2000 and 2015, CDS-PP initially launched the initiative alone but later agreed with PSD, PS and Block the text of the draft resolution that was approved .

The PCP considered a new inquiry committee to be unnecessary to the public bank but ensured that it would not create any obstacle to its constitution and would abstain without submitting any amendments to the subject matter of the work.

The consensus text between CDS-PP, PSD, PS and BE stipulates that this committee should operate for a maximum period of 120 days, among its objectives to determine CGD's management practices in the field of credit granting since 2000, to assess the performance of the bank's administrative, supervisory and audit bodies, external auditors, governments and financial supervisors.



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