GENEVA: Swiss banking giant Credit Suisse yesterday confirmed that it had created investment vehicles for scandal-mired Banco Espirito Santo before it was bailed out by the Portuguese government.
The Swiss bank said it set up the “special placement vehicles” in 2001 and 2002 at the request of BES, which was fully responsible for selling them.
But it denied reports it had played any role in selling or advising in the sale of the securities, which were issued between 2001 and 2008, and then again in 2012 and 2014.
The Wall Street Journal reported customers bought the SPVs without knowledge that they contained debt from various vehicles within the troubled Espirito Santo group.
The paper was sold as a tool to keep afloat the vast family-run business empire, which has since collapsed amid accusations of vast accounting fraud, the financial daily said.
“At no point did Credit Suisse distribute, sell or advise BES clients and their subsidiaries, whether retail or institutional clients, nor any third party, concerning these SPVs or stock issues by the SPVs,” the bank said in a statement.
“Credit Suisse is not exposed to any market risk or credit related to these instruments. In fact, Credit Suisse does not know which of the products was distributed by BES or its branches and subsidiaries,” it added.
BES, once one of Portugal’s largest lenders, was rescued by the government after it reported a record loss and several of its parent companies filed for bankruptcy.
Lisbon initially pledged ¤4.4bn ($5.9bn) in aid as part of a ¤4.9bn rescue package for BES, in a bid to stop its collapse plunging the fragile economy into further crisis. It subsequently cut the bailout to ¤3.9bn thanks to contributions from the financial sector.
AFP
