NEW YORK: Credit Suisse helped put together billions of dollars in securities that were issued by offshore investment vehicles of Banco Espi-rito Santo SA and then sold to the Portuguese bank’s retail customers, the Wall Street Journal (WSJ) reported on its website.
The newspaper cited corporate filings and people familiar with the situation, saying customers didn’t know the investment vehicles were loaded with debt issued by various Espirito Santo companies and served as a mechanism to finance the Portuguese conglomerate.
Troubled Banco Espirito Santo is Portugal’s second largest bank.
The government said it will extend a loan of €3.9 billion (RM16.46 billion) to the bank resolution fund in charge of rescuing Banco Espirito Santo.
WSJ’s website said it was unclear about Credit Suisse’s direct role in selling the securities to bank customers.
Portuguese regulators investigating the Espirito Santo case have identified at least four offshore investment vehicles whose securities, mostly preferred shares, were sold with the help of Credit Suisse to Espirito Santo customers, WSJ.com reported, citing sources familiar with the investigation.
The report said three of the investment firms — Top Renda, EuroAforro Investments, and Poupanca Plus Investments — are based in Jersey, a tax haven in the Channel Islands.
According to corporate records filed with the Jersey Financial Services Commission cited by WSJ.com, Credit Suisse served as “arranger and dealer” for those three vehicles, a role that included not just underwriting securities but also handling administrative and financial needs.
The fourth vehicle, EG Premium, is in the British Virgin Islands, also a tax haven. Reuters