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July 21, 2014updated 04 Apr 2017 12:56pm

Espirito Santo’s Panama unit taken over by Panama authorities

Panamanian banking regulators have taken control of ES Bank, a small unit of Portugal's Espirito Santo, which is under investigation over disclosure of irregularities at related companies.

Panamanian banking regulators have taken control of ES Bank, a small unit of Portugal’s Espirito Santo, which is under investigation over disclosure of irregularities at related companies.

Banco Espirito Santo, one of the largest banks in Portugal, is facing scrutiny from investors and regulators of financial wrongdoings, as reported by Reuters.

A statement by the Panamanian regulators was cited by Reuters as saying that they took over Espirito Santo’s Panamanian subsidiary to "protect and defend the interests of depositors and creditors of the institution, given the lack of liquidity and potential insolvency."

The regulator further explained that the takeover of the bank will continue for 30 days and will not affect the Panamanian financial system.

ES Bank obtained a foreign license in 2001 by the country’s banking regulator.

Meanwhile, reports also emerged that Portuguese Espírito Santo International filed for creditor protection in a Luxembourg court, claiming that it is unable to meet its debt obligations.

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