Ricardo EspÃrito Santo Silva Salgado is known in Portugal as “Dono disto tudo,” or “Owner of everything.’ The oligarch’s family has been calling the shots in Portugal for over a century. It’s the largest shareholder of the country’s biggest stock market listed bank, and controls a string of other financial companies, agricultural, energy, health care and property companies in Portugal and across the globe. But now it looks like the final chapters in the long history of the most renowned members of the country’s elite are about to be written. And perhaps with it a new chapter in Portugal’s and Europe’s financial and economic crisis.
Last week Ricardo Salgado, now aged 70, was arrested. He was detained — later released on bail for â‚¬3m — in connection with a long-running investigation into money laundering and tax evasion. Ricardo Salgado’s arrest didn’t come about of nowhere. The EspÃrito Santo family has been under “intense scrutiny” since earlier this year when an audit ordered by the central bank discovered accounting irregularities at the Luxembourg-registered holding company ESI.
With ESI and its 100%-owned Rioforte now preparing for bankruptcy, the country’s President Anibal Cavaco Silva has admitted that the failure could be systemic: “We cannot ignore that there will be some impact on the real economy,” he said, providing a rather darker forecast that most of the experts quoted in the press with soothing words such as “contained” and “priced-in.”
The central bank has intervened, ejecting Mr Salgado and barring the family from further involvement in the management of Banco EspÃrito Santo; this followed loss of control of the bank after a â‚¬1bn capital increase to shore up the banks finances, even if the family remains the largest single shareholder.
But the repercussions go much further than the EspÃrito Santo clan — different branches of which apparently descended into infighting as members used their influence to take out loans, even after regulators in Portugal and Luxembourg started their investigations.