June 13, 2021

Fainé and KPMG’s experts defend the legality of the share swap between Caixabank and Criteria




The former president of CaixaBank Isidro Fainé and KPMG experts have defended before the National Court the exchange of shares executed between the entity and its holding company, Criteria, which, according to the complainants, would have allowed the bank to become a shareholder in the Portuguese BPI.

Admitted for processing two years ago, the complaint, presented by two shareholders of the entity, denounces alleged crimes of market abuse, unfair administration and corporate crimes in complex operations for the acquisition of BPI. The complaint relates to a series of allegedly irregular operations around the swap contract of 17.24% of the capital that CaixaBank owned in the Bank of East Asia (BEA) and that in December 2015 it transferred to its “controlling shareholder”, Criteria.

In the opinion of the complainants, the transaction, in which Criteria transferred as consideration to CaixaBank the bank’s own shares representing 9.9% of its capital social plus a provisional amount of 642 million euros, had as its ultimate goal the purchase of BPI.

As reported by legal sources, the authors of the expert opinion provided by CaixaBank, who appeared this Thursday before Judge José de la Mata, have assured that the entire swap operation was “well done”. In fact, they have added, both the price and the way of executing it was the one that most protected the shareholders, and it was very beneficial for the bank itself.

Both experts have reviewed the “Advantages” of the swap, proposed within the strategy to improve the highest quality capital ratio (CET1), as the European Central Bank (ECB) had been demanding, and to deconsolidate Criteria and CaixaBank.

Isabel Dos Santos

They have also referred to allegations about the alleged loan of 400 million euros that CaixaBank would have granted to the Banco de Fomento de Angola (BFA), so that Isabel Dos Santos, daughter of the president of that country and who controlled close to 10% of BPI, would support the entry of the Catalan entity into the Portuguese bank.

In line with the statement of the legal representative of CaixaBank, who has not acknowledged that this operation had been carried out, KPMG experts have insisted that it is impossible for a loan of this caliber to have disappeared from the bank’s accounting, and even more difficult that the supervisory organisms have never detected it.

The role of Isidro Fainé

On the role of the former president of the bank, the same sources have recalled that Fainé, like the rest of Criteria’s proprietary directors, left the meeting in which the swap was approved, so he was not involved in the decision.

Initially scheduled for last Monday, Fainé’s statement as defendant had to be postponed due to technical problems with the videoconference that also delayed the appearance of Criteria’s legal representative. For its part, the brief questioning of the holding company focused on its crime prevention plan.

The representative has acknowledged before the judge that at the time of the events Criteria did not have a document of regulatory compliance or “compliance”, which was later; However, it was not until shortly after that the Penal Code forced companies to have such a plan after its reform.

Waiting for Gortázar

Technical problems have changed the schedule for declarations scheduled for this week. Thus, the appearance of the current CEO of CaixaBank, Gonzalo Gortázar, has been delayed although the date is still unknown.

CaixaBank, which held a minority stake in the BIS since 1995, successfully closed its takeover bid on the Portuguese bank in 2017 and took control of 84.5% of its capital, thanks to an outlay of 644.5 million euros.

The complainants point out that CaixaBank carried out the swap in order to become a shareholder in BPI, which in the end would have produced the entity a loss of 687 million euros, although at the time the administrators had only recognized a negative impact of 14 million.

Likewise, they ensure that in the annual accounts for the year 2017 a loss of 102 million euros was collected, effect of the ‘takeover of bank BP’ “.

The letter is also directed against the former director general of international relations Antonio Massanell, two advisers to the presidency, Alejandro García Bragado and Oscar Calderón, the director of regulatory compliance, Juan Antonio Álvarez García, and David KP Li, director of Criteria Caixacorp and president of the BEA.

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