Montepio’s defense asked the court this Tuesday, if the acquittal in the appeal of the fine of 475,000 euros imposed by the supervisor in the case of investments in PT does not conclude, recognize that there was no intent and substantially reduce that amount.
In the final arguments of the judgment of the appeals filed before the Court of Competition, Regulation and Supervision (TCRS), of Santarém, by the Caixa Económica Montepio Geral (CEMG), by its former president António Tomás Correia and by the former directors Jorge Barros Luís and João Neves, João Matos Viana highlighted the fact that the bank admitted that it was wrong, paying the fines for two of the seven violations applied by the Bank of Portugal (BdP), but argued that there was no basis for a conviction in the remaining five.
In October 2021, the Bank of Portugal fined CEMG €475,000, António Tomás Correia €70,000 for four offenses (three negligent and one intentional) and former directors Jorge Barros Luís (€50,000 for three negligent title offenses) and João Neves (25,000 euros for a negligent title).
The process involves investing in two bonds Credit Linked Notes (CLN) issued, one by Crédit Agricole and the other by Morgan Stanley, in Portugal Telecom International Finance (PTIF), for a total amount of 75 million euros, which are contracted for swaps risk of default (Credit Default Swap, CDS), for the same amount, in which CEMG assumed the protection of the issuer.
In its decision, the BoP considered, among other things, that the investment in the two CLNs generated a high exposure to the credit risk of the issuers and PTIFfor an amount of 75 million euros, and that the very particular characteristics of these operations required special care on the part of the different parties involved.
Emphasizing that the internal control system worked as soon as the limits stipulated by the bank itself were exceeded, having adopted the correction procedures, the CEMG representative considered that, even if the TCRS believes that there is a reason for conviction, it should withdraw the intention.
For Matos Viana, when considering the fine measure, the Court must take into account the “very great evolution in internal control procedures” that occurred from 2014 to 2015, which, in his opinion, “dilutes any preventive reason” that could be invoked. .
On the other hand, he pointed out the economic-financial situation of CEMG that, although in recent years it has shown positive results (after the negative 80 million euros in 2020), these continue to be “not very robust”, and, He said that the The application of a fine, at a time when the bank is trying to recover and when “major difficulties” are looming, with inflation and interest rates rising, will “stop” this trajectory.
Matos Viana highlighted the reference made by the Public Ministry (MP), in its allegations, to the bank’s contribution to the social goals of the Associação Mutualista, highlighting that the fine will “penalize” the ability to transfer funds for this purpose.
In the allegations made on Monday, prosecutor Paulo Vieira defended the reduction of the fine imposed on CEMG from 475,000 to 350,000 euros, with a partial suspension of 250,000 euros, taking into account the bank’s social role and poor results, as well as the fact that having renounced the use of one of the infractions, agreeing to pay the fine of 100,000 euros corresponding to this infraction.
During the morning, João Neves’ defense asked Judge Mariana Gomes Machado who “completely absolves” his clientconsidering that the reprimand defended by the deputy “does not repair the damage that has already been done.”
Stating that “justice is either complete or not justice”, Tiago Geraldo affirmed that the error already recognized in the process was from the Financial Department and not from the Accounting Department, in charge of João Neves, having contaminated “everything that came after”. . , in “domino effect”.
According to João Neves’s representative, the BdP team that accompanied the bank and the KPMG auditors saw “the same thing, at the same time”, and did not form any suspicions either.
As the defense of Jorge Barros Luís alleged on Monday, Tiago Geraldes also referred to the fact that the then financial director, José Carlos Mateus, had assumed during the process the error made by one of his employees and, therefore, having been considered fit. by the BoP to assume managerial functions at CEMG.
The trial continues in the afternoon with the arguments of António Tomás Correia’s defense.
Source: Observadora
