Shareholder wars at Banco Português de Investimento

This case study aims to describe the impacts created on Banco Português de Investimento’s governance when supervision of the largest 120 European banks switched from National Banks to the European Central Bank. When this occurred, BPI was informed that its exposure to Angola, through one of its subsidiaries- Banco de Fomento Angolano-, surpassed the limit of the large risks imposed by the ECB in €3 billion. The urge for solutions to avoid daily sanctions by the ECB triggered a fight for control between the bank’s key shareholders, La Caixa and Santoro Finance, given that Isabel dos Santos, daughter of Angola’s president, was a key shareholder both in BPI and in Banco de Fomento Angolanothrough a company named Unitel. The Governance of the Bank comprising a shareholders voting rights limit, the number of Shareholder’s evolution, the negotiation process that included a Portuguese Government intervention, the sale of part of BFA to Unitel and the tender offer launched by La Caixa in order to control BPI are discussed in detail to provide the reader all the information required to assess on whether or not all good Governance principles were followed throughout the process