The Portuguese financial group's problems have been escalating since accounting irregularities were identified at one of its holdings earlier this year.
Dubai’s financial regulator is seeking court approval to wind up the local arm of Portuguese financial group Espirito Santo, the latest in a series of international regulatory actions taken against the family’s collapsed business empire.
The family’s problems have been escalating since accounting irregularities were identified at one of its holdings earlier this year, leading to a 4.9 billion-euro bailout for Banco Espirito Santo, once Portugal’s largest listed bank, and global actions to contain the fall-out in multiple jurisdictions.
The Dubai International Financial Centre Court appointed on Monday Philip Bowers and Neville Kahn of advisory firm Deloitte as joint provisional liquidators of ES Bankers (Dubai) Ltd (ESBD), a Dubai Financial Services Authority statement (DFSA) said.
This came after the regulator was informed ESBD was “no longer able to meet its obligations and continue as a going concern”, the statement added.
ESBD has been hit by the troubles facing the wider Espirito Santo Group, with the DFSA saying on Sept. 18 it was freezing deposits at the bank as its solvency had been “seriously comprised” by the failure of the group’s Swiss unit to repay deposits.
Switzerland’s financial regulator, FINMA, said the following day that it had initiated bankruptcy proceedings against Banque Privee Espirito Santo (BPES) due to the family’s inability to be able to recapitalise the business.
FINMA was already investigating BPES with a focus on its role in distributing securities and financial products to the wider Espirito Santo group.
The primary function of the Dubai liquidators was to protect ESBD’s assets and those of its clients until a formal winding-up hearing at the court on Oct. 19, the DFSA statement said.
ESBD was not permitted to deal with retail clients, nor to accept deposits from UAE clients, said the authority. Depositors in the bank were informed of the freezing of deposits and would be notified of the court decision, it said.