Bank of Portugal suspends BES officials over suspected harmful management

LISBON, July 31 Wed Jul 30, 2014 7:25pm EDT

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LISBON, July 31 (Reuters) - The Bank of Portugal suspended all officials in charge of auditing and supervision at Banco Espirito Santo, saying it suspected "acts of harmful management" had contributed to the 3.6 billion euros half-year loss posted by the bank on Wednesday night.

It also suppressed voting rights of Espirito Santo Financial Group, BES's largest shareholder which holds its 20 percent stake on behalf of the bank's founding family. It named PWC to lead a supervision commission at BES until shareholders name new internal auditing officials.

The central bank wants BES to carry out a capital increase soon using "market solutions", but a public recapitalisation line remains a backup option guaranteeing the bank's solidity even after the massive loss, the Bank of Portugal said in a statement.

It added that "all the necessary conditions are in place for the bank to continue its activities and for the full protection of the rights of depositors". (Reporting By Andrei Khalip; Editing by Laura Noonan)

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