(Bloomberg) — Police in Portugal are investigating the origin of large amounts of cash deposited in Portuguese banks by individuals linked to Novo Banco SA’s ex-chief risk officer Carlos Brandao, according to a person familiar with the investigation.
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Authorities suspect the origin of the funds are linked to individuals in Guinea-Bissau, said the person, who asked not to be named because the investigation is confidential. Portuguese lender Novo Banco, which is controlled by private equity firm Lone Star, fired Brandao this month after identifying suspicious financial transactions in his personal sphere.
The Public Prosecutor’s office said in a statement on Jan. 7 that authorities had carried out searches at a bank and homes in a probe into possible crimes of tax fraud, money laundering and forgery by a board member of Novo Banco, without identifying the director.
Brandao was also a board member at Novo Banco. Both he and his wife have been named “arguidos,” a term similar to person of interest, the person said.
Brandao didn’t respond to messages sent to his mobile phone requesting comment. A Novo Banco representative declined to comment. A spokeswoman at the prosecutor’s office declined to provide further details about the investigation.
The probe takes place at a sensitive time for Novo Banco, which has been preparing to carry out a possible initial public offering of shares. Chief Executive Officer Mark Bourke said at the end of October that the normal windows for IPOs would usually be in the second quarter or after the summer.
Despite the investigation being a serious matter, “it is not related” to the bank and has “no impact whatsoever” on the lender’s activity, Bourke said last week in an email to employees that was seen by Bloomberg.
Portuguese news website Observador and other local media have recently reported, without saying how they got the information, that Brandao allegedly ordered his driver to deposit huge sums of money in Portuguese banks. It also reported that Brandao had secret meetings with individuals from Guinea-Bissau.
Guinea-Bissau’s President Umaro Sissoco Embalo has called allegations of suspicious transactions involving individuals in Guinea-Bissau “a joke.”
“This is a joke, a joke. We know what the spirit of the Portuguese press is in relation to Guinea-Bissau,” Sissoco Embalo said in comments broadcast by Radio Voz do Povo. “Guinea-Bissau is a country of good men.”
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