Portuguese consumer association demands compensation for small BES shareholders

The Portuguese Consumers' Association (DECO) is taking administrative action against the state, the Bank of Portugal and the Portuguese Stock Market Regulator to request compensation for damage done to small shareholders of the beleaguered bank Banco Espirito Santo (BES), the Lusa News Agency reported Thursday.

Ana Cristina Tapadinha from DECO told Lusa that the administrative action was handed in to the Lisbon Administrative Court last Monday.

"In particular regarding the Portuguese state, we are attempting action because we understand that there was a violation of the political-legislative functions and, therefore, small shareholders of the Banco Espirito Santo should receive compensation," Tapadinha said.

Recently, BES clients who had invested in commercial paper and lost their money protested in front of the bank's headquarters demanding a reimbursement.

BES was bailed out in August after a first-half net loss of 3.58 billion euros (4.07 billion U.S. dollars). The bank's former chairman, Ricardo Espirito Santo Silva Salgado, was arrested for alleged tax fraud and money laundering but was released after paying a 3 million euros bail.

The bank was split into a "bad bank" which houses toxic assets and liabilities, and a "good" bank, which houses viable assets like branches, employees and senior debtors. The good bank is now called "Novo Banco" (New Bank).

The eventual sale of Novo Banco will pay for the state's 4.9-billion-euro bailout, according to authorities. Endit