Portugal: Government shuts down Berardo art foundation

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Portugal: Government shuts down Berardo art foundation

8:14 CAT | 20 Jul 2022

File photo: Lusa

Portugal’s government has extinguished the José Berardo Foundation, based in Funchal, through a Cabinet published on Tuesday in the second series of the Official Gazette.

“The extinction of the José Berardo Foundation” is declared following the report of the General Inspectorate of Finance, 2019, under the Framework Law on Foundations and is effective because “the activities developed by the José Berardo Foundation show that the real purpose does not coincide with the purpose envisaged in the act of institution,” as read in the order signed by the Cabinet Secretary of State, André Moz Caldas.

The José Berardo Foundation, created in Funchal in 1988, was an instrument in the management of the businessman’s business, through which he contracted debt, particularly for the acquisition of shares in Millenium BCP bank, being at the basis of the lawsuit filed by BCP, CGD and Novo Banco banks, for debts exceeding 900 million euros.

“The management body of the José Berardo Foundation is limited to the practice of merely conservative acts of the foundational heritage and forbidden to practice acts that involve the sale or encumbrance of any goods, social or financial participation, as well as the assumption of new responsibilities,” reads the diploma published today.

The Foundation’s statutes provided for “charitable, educational, artistic and scientific” purposes, giving rise to its recognition by the Regional Secretary for Social Affairs of Madeira, “as a private institution of social solidarity”, in 1991, subsequently registered with the Institute of Social Security of Madeira, which was cancelled by order of 26 November 2019.

The opening of an official investigation procedure for the extinction of the José Berardo Foundation took place on January 5 this year, after opinions were issued by the Advisory Council of Foundations and the State Centre for Legal Competence.

The extinction is established based on articles 192 of the Civil Code and 35 of the Framework Law of Foundations, which imposes it when “the developed activities demonstrate that the real purpose does not coincide with the purpose foreseen in the act of institution”.

The extinction process now obliges the foundation to deliver to the General Secretariat of the Cabinet (SGPCM), within ten working days, its accounts, debts and liabilities, the list of assets and existing contracts, as well as the identification of its employees and the responsibilities assumed.

The managers of the foundation are also held “personally and jointly and severally liable for the acts that they carry out and the damages that arise from them, in violation of the previous rules”, as stated in the diploma.

Thus, in addition to the limitation to “merely conservative acts of the foundational patrimony”, any other actions require “prior authorisation from the competent entity” for extinction, the SGPCM.

The order states that “the books and documents of accountability of the José Berardo Foundation” must be delivered until the date of extinction.

The SGPCM also requires the “detailed list” of “goods, whether movable or immovable, social and financial shares (…), all bank accounts and securities, of which the José Berardo Foundation is the sole holder or in joint account with other entities”, as well as “liabilities, including liabilities arising from contracts to which the José Berardo Foundation is a party, particularly those involving financial responsibility”.

It also requires the “detailed list of guarantees, in rem or personal, provided by the José Berardo Foundation to entities that are in a relationship of control or group with the José Berardo Foundation, members or former members of the governing bodies of the José Berardo Foundation or these entities, or any third parties, indicating the beneficiaries of the guarantees, the relationship underlying the provision of the guarantees, as well as the assets encumbered with these guarantees.

Also requested are the contracts with all the entities, namely credit institutions or financial companies, to which the José Berardo Foundation is a party.

The identification of its employees, the nature of their contracts and respective remuneration must also be delivered to the SGPCM, as well as “pending legal cases and administrative procedures in which the José Berardo Foundation is a party or interested”.

In this case, “the identification of the specific process or procedure, the procedural phase, the procedural subjects, the litigation involved and the (estimated) values of the disputed debts or credits” must be made.

According to the law, “the monitoring of the liquidation process of the José Berardo Foundation is the responsibility of the SGPCM, including with regard to the respective proceedings, without prejudice to other entities assisting in these functions.

José Berardo was detained on 29 June 2021, having been indicted on eight counts of aggravated swindling, money laundering, aggravated tax fraud, two counts of aggravated abuse of trust and one count of embezzlement, following the proceedings opened by the banks.

He was eventually given a bail of five million euros and a ban on leaving the country without court authorisation.

As part of this case, in July of the same year, the works from the businessman’s art collection were also seized, which were the basis of the protocol established with the state in 2006, which led to the creation of the Modern and Contemporary Art Foundation – Berardo Collection and the opening of the Berardo Collection Museum, at Lisbon’s Belém Cultural Centre (CCB) the following year.

Renewed in 2016, with an addendum, this agreement was denounced by the minister of culture, Pedro Adão e Silva, half a year before the end of its term, in December this year.

According to Pedro Adão e Silva, from January 2023, the space at the CCB, where the art collection is located, will no longer be called the Berardo Collection Museum, it will have a new designation.

Source: Lusa