The Venezuelan government invested nearly €300 million in Grupo Espírito Santo and would like it back.
Despite starting court proceedings to recover amounts invested by two public funds, Desarrollo Economico e Social de Venezuela (BANDES), and the Fondo de Desarrollo Nacional (FONDEN), the government quietly is hampering Portuguese companies from transferring legitimate funds back to the head office treasuries.
State owned airline TAP has around €100 million tied up in Venezuela, according to state company Párapublica’s annual report for 2014, and Portuguese companies have billions of euros sitting in Venezuelan banks.
Venezuela is trying to recover its investment of €297 million in commercial bonds made by two public funds in Espírito Santo International, part of Grupo Espírito Santo.
The Venezuelan government already has contacted Lisbon and is preparing to go to court to recover the money lost by investing in Grupo Espírito Santo.
Venezuela has started to block money transfers attempted by Portuguese companies. There already exist laws that strictly control the money that can leave the country and it is not hard to delay or frustrate further transfers from targeted companies.
In June 2014, Ricardo Salgado (pictured after his arrest) who at that time was the chief executive of Banco Espírito Santo, sent two ‘letters of comfort’ to Venezuelan banks which guaranteed the repayment of the money invested.
These turned out to be ‘not worth the paper they were written on’ as the letters were signed without the knowledge of the BES board and were signed only by Salgado and his cousin José Manuel Espírito Santo.
Options open to the Venezuelan government include court action against the administrators of Espírito Santo International, against the Bank of Portugal (aka the taxpayer) which failed in its regulatory role, or against the Portuguese state (again, the Portuguese taxpayer.)
The Venezuelan government also can contest the division of BES into ‘good bank, bad bank’ last August which saw its loan remain at bad bank BES where it is close to worthless.
Comments
What Juncker is clearly ignorant of is that Angles and Saxons are tribes that came from Germany. Angles from Schleswig-Holstein and Saxons from, well who would have thought it ... Saxony.
So in taking a swipe at the UK (and to an extent the english speaking world) - he has also dragged in Germany.
So now read up on what the Germans think ...
http://www.dw.de/100-days-of-tsipras-chaos-frustration-and-disarray/a-18430596
http://www.telegraph.co.uk/finance/economics/11584410/Bankrupt-Greeks-blame-Troika-divisions-for-debt-impasse.html
The important thing for each Portuguese is to keep focussed on the Portuguese tax payer in this totally avoidable mess. Totally avoidable if only Portugal had 'developed' 30 years ago - not waiting until the last year or two to wake up and smell the coffee.
For it is he / she who will pick up the tab and additionally pointlessly pay extra amounts for any delay. Extra such as many further millions wasted on lawyers fees and interest lost.
For delay there will be. As the urgency is on selling Novo Banco as a hot potato. Hoping the next owner will pick up the tab for all these 'leasado's' (wounded) Which the new owner will not having stripped out all these 'debts' and left them with the Portuguese tax payer !
And Portugal sinks further into deficit. Like Greece squealing for debt haircuts but, deep down, is Portugal today any different from yesterday ....?