Lawyer applauds “courage to do justice even in this adverse environment”
The Administrative and Fiscal Court of Funchal annulled the extinction of the José Berardo Foundation, reversing a decision the government took in July 2022 through an order of the cabinet presidency.
According to the ruling, dated Monday, to which Lusa had access, the court found that the extinction of the foundation by the order of the secretary of state for the presidency of the cabinet, André Moz Caldas, signed on July 11 2022, was based on several defects.
At stake are the lack of competence of the administrative body to take the decision, the violation of a duty of prior hearing and, above all, the error in the assumptions of extinction, in particular the alleged deviation of the institution from the purposes, under the argument that the José Berardo Foundation was aimed essentially at economic-financial activity and was used by Joe Berardo to manage investments.
“There is (…) no obstacle to the acquisition, for consideration, by foundations, of goods or rights with the aim of applying the income from them to strengthen the assets initially allocated to the pursuit of their purposes,” reads the decision, which adds: “The deviation of purpose will occur when (…) there is in the very essence of the institute a root vice, a hidden inclination towards purposes other than those ostensibly consecrated.”
Judge Eurico Gomes pointed out that the audit report of the Inspectorate General of Finance (IGF) – which served as the basis for the decision to terminate – focused the analysis on asset management and the economic and financial situation of the foundation between 2007 and 2018, despite the fact that this entity was created in 1988 and formally recognised at the end of the following year. Therefore, he argued that only 12 of the 32 years of existence of the José Berardo Foundation were analysed, most particularly the period between 2015 and 2017.
“Even though the factual situations identified in the audit report may substantiate the practice, by the management body, of several acts in violation of the duty of prudence in the management of the foundation’s patrimonial resources and violation of the statutory purposes (…), the truth is that (…) it cannot be stated that the activity globally developed by the applicant Foundation, during its 32 years of existence, deviated, in a permanent, reiterated and systematic way, from the purposes of social interest,” he said.
About the other defects, the judge understood the lack of competence for the extinction that “when practising the impugned act, the secretary of state of the presidency of the cabinet exercised an alien competence, without being qualified for that effect”.
In relation to the violation of the duty of prior hearing, the court explained that the arguments to dispense the prior hearing of the foundation to safeguard the execution of the extinction did not allow this conclusion to be drawn, making the respective order illegal.
“In the terms and with the fundaments displayed, I judge the action well founded and, in consequence, I annul the order of 11.07.2022”, he concluded.
Confronted by Lusa with this decision, the lawyer for the José Berardo Foundation, Paulo Saragoça da Matta, limited himself to expressing “appreciation for the fact that the Administrative and Fiscal Court of Funchal had the courage to do justice, even in this adverse environment,” refusing to make any further statements.
The extinction of the Fundação José Berardo was declared following the report of the Inspectorate General of Finance, 2019, under the Framework Law of Foundations and was effective because “the activities [of this institution] show that the real purpose does not coincide with the purpose envisaged in the act of institution”, as defined the order signed by 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, including for the acquisition of shares of Millennium BCP, which is the basis of legal proceedings against the Madeiran businessman, whose bail initially was set at €5 million.
An official source for the ministry of the presidency has said the government will be appealing the decision.
Source material: Lusa
