The former director of Novo Banco’s internal audit department revealed that the first sale of a large loan portfolio of Novo Banco, had a value of 1.5 billion euros, was made without a “robust” process that ensured that there were no bank-related parties involved.
“There was no evidence to give us the assurance that there would be a robust process that would prevent” transactions with related parties, said Luís Seabra at his hearing in the parliamentary commission of inquiry into the losses of Novo Banco and attributed to the Resolution Fund.
This operation, known as Nata I, took place in 2018 and caused losses of 110 million. The buyer was a consortium formed by the American fund KKR Credit Advisors and for Lx Investments Partners.
This question arises because one of the commitments assumed by Lone Star, when it bought the bank in 2017, was that it refrained from acquiring internal assets. The fund has ensured that never participated in any transaction as a buyer when Novo Banco was a seller.
“During the audit we have not identified transactions with related parties”, Said Luís Seabra, quoted by the weekly Expresso.
Thus, the internal audit department saw no problems, but also assumed that there was no effective system that could detect any problems. “It was because of this that a recommendation was made for there to be a more robust process,” he continued, saying that the audit report was shared with the bank’s leadership.
According to the official, Nata I was one of two dossiers in which there was no way to guarantee that there were no transactions with related parties. The audit grade was “satisfactory” – and not adequate, which would be the highest grade.
Regarding specific clients, Luís Seabra said that the Resolution Fund requested audits of two debtors’ files: Promovalor, from Luís Filipe Vieira, José Guilherme and the bottom Invesfundo.
At Promovalor, the option was to do an external audit. In the second case, the internal audit fell because Deloitte’s special audit, carried out by law and determined by the Government, covered this case.
The former official also reported on two other cases of audits requested by the Resolution Fund: to the group Tricks it’s at Arnaldo Dias.
Regarding his resignation, Luís Seabra assured that he had no relationship with disagreements with the executive administration. “I left for a simple reason: to embrace another project and not to break with the management of Novo Banco. I had the opportunity to embrace another professional project, I left because I wanted to ”.
ECB assessed audit confidentiality
According to the Público newspaper, the European Central Bank (ECB) had to give a final opinion on the declassification of the audit of the Deloitte to the New Bank so that it could be made public by Parliament. MPs have had a confidential version of the audit for about a week that does not allow it to be shared with citizens.
At stake will be previous positions taken by the ECB on matters involving Novo Banco and which raised doubts as to whether or not they would be covered by a duty of secrecy.
According to the morning man, the ECB’s decision came with the identification of some of the parties generated doubts classified as confidential.
This was a step that followed the delivery of the audit by Parliament. The next phase will be to make available after the parties subject to a duty of secrecy have been eliminated. This public version is already in Parliament.
The 2019 law imposed that whenever public money is injected into a financial institution, a special audit must be carried out. After the special audit that covered the years 2000 to 2018, the Deloitte carried out a new audit on the year 2019, as Novo Banco presented losses of 1,058.8 million euros, which resulted in a capital injection of more than 1 billion euros.
Maria Campos, ZAP //