Dubai’s financial regulator has frozen the operations of the private banking institution ES Bankers Dubai (ESBD) — the latest twist coming from the collapse of Portugal’s Banco Espirito Santo (BES).
The Dubai Financial Services Authority said that it was restricting ESBD, a private bank operating in the free zone, from taking or paying deposits and that the firm was required to maintain and preserve its assets.
The regulator said that the restrictions were deemed necessary in light of the failure of a Swiss-domiciled bank in the Espirito Santo Group, Banque Privee Espirito Santo, to honour contractual commitments to ESBD and to repay deposits owed to ESBD in the normal course of business.
Under the new restrictions, ESBD will be prohibited from transferring any assets to other Espirito Santo Group companies.
The regulator’s move follows the collapse and partial bailout in August of BES.
BES, the parent of ESBD, was forced into an emergency restructuring after posting a first half loss of €3.58bn and impairments of €4.25bn, with numerous allegations of financial wrongdoing by one of its principal shareholders, Espirito Santo International.
It was reported earlier this week that regulators in the United States had launched an investigation into BES’s Florida unit over a series of allegedly improper transactions with the bank’s operations in Panama.
The DFSA has also suspended the status of Ricardo Espirito Santo Silva Salgado — until now the head of BES and a director of ESBD.
As a DIFC bank, ESBD is not permitted to deal with retail clients, nor to accept deposits from UAE clients.
jeverington@thenational.ae
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