The billion-dollar fall of the house of Espirito Santo

On June 9, with his 150-year-old Portuguese corporate dynasty close to collapse, patriarch Ricardo Espirito Santo Salgado made a desperate attempt to save it. Salgado signed two letters to Venezuela’s state oil company, which had bought $365 million in bonds from his family’s holding company. The holding company was in financial trouble. But the letters, according to copies seen by Reuters, assured the Venezuelans that their investment was safe. The ‘cartas-conforto’ – letters of comfort were written on the letterhead of Banco Espirito Santo, a large lender controlled by the family. They were co-signed by Salgado, who was both the bank’s chief executive and head of the family holding company. ‘Banco Espirito Santo guarantees ... it will provide the necessary funds to allow reimbursement at maturity,’ said the letters, according to Reuters.