* Head of Espirito Santo family named as suspect in probe
* Investigation into alleged fraud, money-laundering
* Family problems mount as holdings seek creditor protection
(Recasts with investigating judge statement, comments, updates
By Andrei Khalip
LISBON, July 24 An investigating judge has named
Ricardo Salgado, head of Portugal's Espirito Santo banking
family and former chief of Banco Espirito Santo (BES),
as a suspect in a long-running money-laundering and tax evasion
Portugal's prosecutor general's office said on Thursday it
was investigating Salgado for alleged fraud, money-laundering
and falsification of documents.
Salgado was released on bail of 3 million euros ($4
million)after being detained and questioned, it said in a
Salgado's lawyer Francisco Proenca told reporters his client
would continue to collaborate with authorities and "justice will
prevail". Salgado has not been charged.
The detention of Salgado comes as the Espirito Santo family
is separately trying to save its business empire from financial
collapse following the disclosure of accounting irregularities
at one of its companies.
Judicial and market authorities in Portugal, Luxembourg and
Panama are examining the family holdings. There is no suggestion
that the money-laundering investigation is related to the
family's recent financial problems.
Salgado, 70, was brought before a judge at Lisbon's Central
Criminal Custody Court at around 0930 GMT and stayed for several
hours, a court official said.
Salgado had previously been classified by prosecutors as a
witness in the three-year-old investigation.
Under Portuguese law the status of "arguido", or formal
suspect, differs from the suspect status in other legal systems
as it gives the person certain legal advantages in being
questioned and does not per se involve a formal accusation.
Separately on Thursday, Carlos Tavares, head of Portugal's
CMVM securities markets watchdog, said the regulator had
examined Espirito Santo companies various times over the past
six years and had alerted prosecutors about possible illegal
There were "signs of abuse of insider information and
possible crime of confidence abuse," Tavares said before a
Portugal's prosecutor general's office did not comment on
Tavares' remarks. It said last week that there were several
investigations underway into the situation around the Espirito
The Espirito Santo family has been under regulator and
market scrutiny since a central bank-ordered audit earlier this
year discovered irregularities at ESI, a Luxembourg-registered
family holding company. ESI and its subholdings Rioforte and
ESFG filed for creditor protection in the past week.
The money-laundering investigation, codenamed Monte Branco
by prosecutors, possibly in a reference to the Swiss mountain
Mont Blanc, has so far focused on the activities of Swiss-based
asset manager Akoya, which worked with Portuguese customers via
a local intermediary with links to local banks.
Akoya was run by two former managers of Swiss bank UBS, one
of them Portuguese. A former chief executive of Banco Espirito
Santo's Angolan unit, or BESA, was a shareholder in Akoya.
The investigation, which began in 2011, has resulted in
brief detentions and interrogations of various individuals. No
one has been charged.
BES shares, which have rebounded from near record lows in
the past two days after two major investors bought into the
bank, pared their morning gains of up to 10 percent to close 1.9
percent higher. Traders now say they see the bank as mostly
isolated from the family problems.
The Espirito Santo family lost control of BES after a
billion euros share issue last month. An independent management
team took over the country's largest listed bank by assets weeks
later, though the family remains the largest single shareholder.
Ricardo Costa, director of Expresso weekly, said Salgado's
detention on Thursday was indicative of the family's declining
influence. "The idea that one gets from this is that the
Portuguese justice system acts fast when people cease being
powerful," Costa said in a television interview.
($1 = 0.7426 Euros)
(Editing by Alessandra Galloni and Mark Potter)