Banco Espírito Santo Angola’s Toxic Loans to the Elite

Banco Espírito Santo Angola (BESA) is faced with serious financial problems caused by bad loans to the tune of US$6.5 billion including US$1.5 billion in interest, Maka Angola has learnt from reliable sources.

During Álvaro Sobrinho’s tenure as chairman of the bank’s executive committee (2002-2013), BESA took to granting astronomical loans, mostly to well-known figures in the Angolan regime, including several members of the ruling People’s Movement for the Liberation of Angola (MPLA) Politburo. Since 2013 the chairman of BESA’s board is an MPLA Politburo member, António Paulo Kassoma, who has served as prime minister and speaker of the National Assembly.

According to information obtained by Maka Angola, the bank had made loans totalling nearly US$200 million with Álvaro Sobrinho as the main beneficiary. The bank now wants to recoup this loan.

Eugénio Neto “Geny Neto”, the vice chairman of Espírito Santo Commerce (Escom) in Angola, has been named as the “facilitator” in granting loans to the top echelons of the MPLA. He himself also received loans from BESA  worth US$500 million. Escom is part of the Portuguese Grupo Espírito Santo, the parent company of Banco Espírito Santo, which is the majority shareholder of BESA with 51.94 percent.

BESA’s loans to leading regime figures are now considered “toxic debt” since they are very unlikely ever to be repaid. The size of the financial hole created by Álvaro Sobrinho was unknown even to the Portuguese headquarters of Banco Espírito Santo (BES) until his term as chairman ended.

Recently, to save the bank from collapse, the Angolan government had to grant BESA a sovereign guarantee.

Both the BESA management and BES have been secretive in their handling both of the crisis and of the scandal surrounding it. There is a fear that any information that gets out could further damage BES’s already fragile image on the international stage.

The public revelation of BESA’s current crisis could also damage the credibility of Banco Valor, which Álvaro Sobrinho acquired after standing down as chair of BESA. Maka Angola has learnt that Sobrinho is currently travelling abroad in search of partners for this new venture.

The Angolan Central Bank has also adopted an attitude of secrecy in dealing with the affair in order not to harm the image of the national banking system abroad.

Álvaro Sobrinho is under investigation in Portugal in a case brought by the Angolan authorities for his alleged complicity in siphoning US$137 million from the Angolan Central Bank.

Sobrinho also has significant investments in media. In Portugal he owns the Sol newspaper and a 15% share in Cofina, a company that owns the newspapers Jornal de Negócios and Correio da Manhã. He has shares in Imprensa, the company that owns SIC television and the weekly Expresso. In Angola he owns the papers Novo Jornal and Agora, among others.

In recent years, Álvaro Sobrinho has tried to present himself to the world as a great businessman and African philanthropist.
For example, he is founder and co-chair of PlanetEarth Institute, a philanthropic institution whose trustees include Lord Paul Boateng , a member of Britain’s House of Lords and Sir Christopher Edwards, chairman of the Chelsea and Westminster Hospital National Health Service Trust.