Ex-head of Portugese bank BES put under house arrest

The former head of Portugal's Banco Espirito Santo, Ricardo Salgado, was placed under house arrest after being questioned by a magistrate over his role in the bank's collapse, his lawyer said.

Francisco Proenca de Carvalho called the measure "disproportionate" in remarks to the press after the 12-hour questioning.

On Monday the former banker was questioned by the state prosecutor, who decided to send him for further questioning in front of an investigating magistrate.

The prosecutor referred in particular to suspicion of forgery, breach of trust, tax evasion or money laundering, in a statement released Friday.

Once one of Portugal's largest lenders, BES collapsed after reporting a record loss last year and its three holding companies declared themselves insolvent, facing allegations of accounting fraud.

The bank's woes threatened to drag down Portugal's economy, which had only gingerly emerged from a three-year bailout, prompting the government and the European Union to swiftly come to the rescue.

The good assets of the ailing bank were transferred into Novo Banco as part of a 4.9-billion-euro ($5.4 billion) bailout of BES, including 3.9 billion from the government.

For a year numerous enquiries have been opened by the Portuguese authorities to determine who is responsible for the scandal.

Salgado was forced out as head of BES after 23 years in June 2014 amid allegations of accounting irregularities at one of the bank's Luxembourg-based holding companies.

At a parliamentary session in December, Salgado denied "having given instructions" to falsify BES's accounts.

But the Bank of Portugal has since started a series of proceedings against most BES executives, including its former chief, suspected of "malicious acts" and "ruinous management".

The authorities have also seized property belonging to the Espirito Santo family, Portugal's last banking dynasty, and its financiers.

The questioning of Salgado comes a year to the day after his arrest in connection with another financial matter, where he was indicted for money laundering before being released on bail of 3 million euros.