More scrambling in Banco Espirito Santo debacle
Portugal's financially troubled Espirito Santo family loosened its grip on the country's largest listed bank, announcing a stake sale and hastening management change after prompting from the central bank which is trying to calm investors.
Recent disclosures about financial irregularities at a web of family-held holding companies behind Ban co Espirito Santo (BES), have raised questions about potentially destabilising losses at the bank and other companies.
Those worries roiled markets in Europe and beyond last week and have also knocked Portugal Telecom, waiting to be reimbursed on some of the €897m in debt issued by one of the family holding companies.
In a statement, Espirito Santo Financial Group (ESFG), the main shareholder in BES, said it sold a 4.99pc stake - to repay a loan taken during the bank's capital increase in May - which reduced its stake in the bank to 20.1pc. It did not say to whom it had sold the stake.
That followed news from BES that its board had put in place new executives - including respected economist Vitor Bento as chief executive - hastening changes not due to happen until the end of the month after pressure from the Bank of Portugal.
Joao Moreira Rato, who heads Portugal's IGCP debt agency, takes over as chief financial officer. He, Mr Bento and new deputy CEO Jose Honorio replace Espirito Santo family members including its patriarch Ricardo Espirito Santo Salgado, pictured left, who had agreed to resign earlier.
A shareholder meeting set for July 31 must ratify the appointments, BES said.
ESFG is part of the business empire of the Espirito Santo family - a vast conglomerate with holdings in banks, hotels and healthcare. It has been under regulator scrutiny over financial problems at its holding companies.
An audit carried out earlier this year found a "serious financial condition" at Luxembourg-registered Espirito Santo International. The family lost control of BES in a billion euro capital raise completed in June.