PracticeAuditKPMG’s audit discovers Portugese bank irregularities

KPMG's audit discovers Portugese bank irregularities

Espirito Santo International, which holds a stake in Banco Espirito, in a "serious financial condition"

AN AUDIT by KPMG of Portugese financial giant Espirito Santo International (ESI) has found it is in a “serious financial condition”.

In a US regulatory filing by its affiliate Banco Espirito Santo, details are revealed about the parlous financial condition of its parent. A review of ESI’s financial statements for 30 September 2013 and 31 December 2013 by KPMG found irregularities in its accounts.

The audit committee of Espirito Santo Financial Group (which owns a share of Banco Espirito and is itself part-owned by ESI) also identified irregularities in ESI’s accounts.

While Banco Espirito stated that it was not responsible for ESI’s problems, it accepted that it might face reputational damage as a result.

Debt from ESI had previously been sold to ESFG and subsequently onto Banco Espirito clients, a move that, while not illegal, had prompted the audit.

Banco Espirito CEO Ricardo Salgado had sat on ESI’s board until March.

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