Supreme confirms arrest of former president of Banco Privado

The effective prison sentence of João Rendeiro will only materialize after a final decision. The former president of Banco Privado Português (BPP) was sentenced to five years and eight months in prison for several crimes of computer fraud and document forgery.

The Supreme Court of Justice confirmed the prison sentence of João Rendeiro in the context of the Banco Privado Português (BPP) case. The news was advanced by TVI and Eco. João Rendeiro, the former president of BPP, continues to be sentenced to five years and eight months of effective imprisonment for computer falsification and falsification of documents.

At issue is the falsification of the bank's accounts to hide BPP's financial losses. The Supreme Court of Justice thus confirmed the decision of the Lisbon Court of Appeal.

João Rendeiro, former BPP CEO, had been sentenced to a suspended sentence at the trial, a decision that was reversed after the Public Prosecutor's appeal.

The defendant decided to appeal to the Supreme Court, which ended up confirming the effective prison sentence, which will only materialize after a final decision, when all the remedies for higher courts have been exhausted.

The Lisbon Court of Appeal (TRL) sentenced former President of Banco Privado Português (BPP) João Rendeiro to five years and eight months in prison for various crimes of computer fraud and document forgery. This is an aggravation, in eight months, of the first instance conviction, as requested by the Public Ministry, a decision that the founder and president of BPP, who went bankrupt in 2010, appealed.

The Court of Appeal not only rejected Rendeiro's appeal, but also denied the appeals against the first-level conviction decision of former BPP administrators Paulo Guichard, Salvador Fezas Vital and Paulo Lopes.

Former administrator Paulo Guichard was sentenced to four years and three months, suspended sentence in his execution, and to the payment of 25 thousand euros to a non-profit association. Salvador Fezas Vital was sentenced to three years and six months in prison for the same crimes (with a suspended sentence if he paid 15 euros to the Cais association).

Former BPP administrator Paulo Lopes, on the other hand, saw the suspended sentence of one year and nine months in prison confirmed.

BPP was a bank specialized in wealth management, and in 2008, it was intervened after announcing losses of 800 million euros, and being unable to pay its guaranteed return obligations to customers.

In 2010, Banco de Portugal canceled the BPP bank license, accused the former managers of falsifying obligations associated with absolute return products (guaranteed capital) where customers applied the savings.

Chronology of the BPP case:

November 13, 2008 - The credit rating agency Moody's increases the credit rating of Banco Privado Português, cutting not only the rating (a measure of credit risk) but also the BSFR indicator of financial strength, which measures the probability of a bank needs to use the help of third parties (shareholders or official institutions).

November 20, 2008 - João Rendeiro, founder, largest shareholder and then still chairman of the Board of Directors of BPP, requests the State guarantee for a loan of 750 million euros from Citigroup. Four days later, the governor of the central bank, Vítor Constâncio, announces that Banco de Portugal (BdP) will give a negative opinion to the request for state guarantees.

December 1, 2008 - Banco de Portugal decides to intervene with Banco Privado. Appoints a provisional administration, led by Fernando Adão da Fonseca, to accompany a rescue plan for the institution, which includes a loan negotiated with six other Portuguese banks, worth 450 million euros. The loan is guaranteed by the State, supported by a pledge of BPP assets and is “to enable BPP to meet the liability of the bank's balance sheet liabilities to depositors and other creditors”, but leaves out all other commitments, including those that are in the “scope of wealth management activity”.

In March 2010, even before the bank became insolvent, and to liquidate all investment vehicles that BPP had created in the Virgin Islands, which were managed from BPP Cayman, which in turn was controlled by BPP, a Special Investment Fund (FEI) of BPP is created, a megafund, which aggregates the assets of absolute return customers. The fund was created with a ten-year maturity.

In 2012, the Management Committee for the Investor Compensation System (SII), managed by CMVM, informs that the System will start processing the payment of indemnities within the scope of the triggering caused by Banco Privado Português (BPP). The credits of 411 BPP clients were considered as not eligible for coverage by the Investor Compensation System.

In 2016, Jaime Antunes, president of Privado Cliente, announces that the majority of the approximately three participants in Banco Privado Português 'absolute mega-fund' will recover the capital invested in those products. “Surely more than 90% of absolute return customers recovered the capital they invested in BPP”, said the fund's promoter at the time.

The fund, which was liquidated that year, had almost 700 million euros of assets, but over time the management company chosen at the time, Banif Gestão de Ativos, was selling some assets and distributing liquidity to the participants.

Through the valuation of these assets in the fund, plus the participation of the Deposit Guarantee Fund (FGD) and the Investor Compensation System (SII), most BPP customers who invested in absolute return recovered their capital.


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