The Bank of Portugal appeals the court’s decision of having to show the sale contract of Novo Banco

  • ECO News
  • 4 January 2018

The Bank of Portugal decided to lodge an appeal after the court demanded that BdP had to hand in the sale contract of Novo Banco to international funds who suffered losses in BES.

The Bank of Portugal decided to appeal the Lisbon administrative court’s decision, which subpoenaed the institution headed by Carlos Costa to disclose the sale contract of Novo Banco, ECO knows. The request of access to the sale contract of the financial institution to the North American Fund Lone Star was made by 19 international investment funds which invested in subordinated bonds from BES, registering major losses with the bank’s resolution in 2014.

ECO knows the appeal does not concern the disclosure of the contract itself, since the Portuguese central bank had complied with similar requests in other situations. The entity headed by Carlos Costa is lodging an appeal because it wants to clarify a “legal aspect” that is said to be sensitive to the regulator. When contacted by ECO, the Bank of Portugal chose not to make any comments.

It was in December that the administrative court of Lisbon asked the Bank of Portugal to disclose the sale contract of Novo Bank to international funds that invested in bonds from BES, although BdP was able to protects the parts considered to be confidential.

The Portuguese news agency Lusa was able to access the sentence from the administrative court of Lisbon which subpoenaed the Bank of Portugal and the banking Resolution Fund to give those international funds “a copy of Novo Banco’s sale contract within 10 days”, even if they excluded “information about confidential matters”. Nonetheless, the Court also decided that the entity headed by Carlos Costa had to justify the information it concealed.

These investment funds had already requested access to the contract between the Bank of Portugal and the Resolution Fund in September, but since they were not granted the contract, they moved forward with a lawsuit “requesting the provision of information and consultation of the files”.

Novo Banco was sold to the North American fund Lone Star in October of last year. The agreement which included the one billion euros’ injection in the bank that emerged from BES in August of 2014. The first 750 million euros’ check was written in the closing of the operation and the remaining 250 million euros arrived before the end of last year.

PUB